06 Oct Planning can save your business from the big C
Many small business owners don’t see the point of planning, especially when running an online business. They see the formula as simple: get suppliers, buy stock, put up a website or list on an auction website and wait for profits. Alas, it’s not that simple because of the big C word – competitors.
It is not always the case, but if you can see a business opportunity, then chances are good that many other people can see it too. How do you protect your idea online? The answer is planning!
Planning done up front can save your business from another big C – the Crash – when the economy gets tough, sales are harder to come by, competitors get more aggressive and customers get ruder and more demanding.
Planning need not be a painstaking task of developing a 50+ page document that just sits there on the shelf or in your drawer gathering dust only to be shown off when the bank asks how you are doing with the startup money you borrowed. Planning can be smart, ongoing and well targeted to your business. Here’s how.
- Think inwards: why you are in the business and what your strengths and weaknesses are compared to your biggest and closest competition. What do you have that they don’t? Maybe you are approaching things from a different angle? Doing something with your suppliers a little differently? Have a slightly different product with different benefits?
- Think outwards: who are your customers and what are the potential benefits of buying your products? What opportunities are there to gain new customers from your competitors? What opportunities are there to grow the entire industry and get new types of people buying the products you sell?
- Think money: How much does it really cost to sell one unit of your product? Split up your costs into three parts: the costs of setting up production of your product (e.g. the fixed costs of setting up your business), the cost of producing your product (the cost of getting your products manufactured and delivered to you) and the business overhead that’s practically the same whether you sell one product or one million (lighting, power, Internet access, shopping cart software rental, staff, stationery, etc.).
- Think measurement: How can you measure what you do? How do you know how much cash you have for your business at any time? How can you separate your personal and business expenses (you’ll need to do this well because your accountant and the ATO will want to know!), how can you measure your sales? What measures of success can you set?
- Think Targets: Who are you targeting? Set yourself realistic goals for sales, obtaining suppliers and how you will reward yourself when you reach them. If you do that you will have more motivation to actually use your plan and make it work.
- Think Actions:Write down your specific actions you will take in a given year and given months. Make them into a checklist and put them into your computer’s calendar or to do list (e.g. MS outlook) so it keeps annoying you until they’re done. Print out lists every day or week of what you have achieved and what you have to do next. Use your plan – it’s not an academic exercise, it’s something that can really help you succeed.
What will the world be like when you win? Keep focussed on your goals and ticking off the targets when you achieve them. You won’t win without a plan, but a carefully made plan needn’t be complex or painful – it should be part of your business life.