A common thought process that many small business owners possess is how to stay ahead of their competition and help grow their market share. Reducing the cost of products and services is usually the most common strategy they implement with the assumption that it will help their objectives. At times this works until their competitors initiate a similar strategy. They spend more time in strategizing on how to profit in the present and stay ahead of their competition, and they get distracted from planning long term business sustainability.
When the economy goes through it’s ups and downs, small businesses often ride the unpleasant roller coaster. The only way to hang on to that rough ride is by adapting to the economical movements. Write your business plan if you have not written one or rewrite it if you wrote one a long time ago because things are different today. The objective is to restructure the state of your business based on the current economic conditions.
I often meet with existing business owners who indicate that they need more money to keep operating their existing business. Unfortunately, I see that many of the small business owners who suffer losses never had or never maintained a written business plan, which only decreases their chances of survival during rough economic times. The sad part is that those who have been reporting losses are unlikely to get approved for a bank loan because lenders foresee more risk in lending money to businesses that show recent losses. Sometimes just to keep the business floating, some small business owners borrow money from their personal accounts, which at times leads to higher risk if they do not recover the losses quickly.
In today’s economic conditions, small business owners should maintain or update their business plan including their financial projections at least once every six months. Consistently maintaining a business plan helps identify the roadblocks more frequently, and warn them of potential hazards. A well-written business plan with very good market planning helps increase the possibilities of a long-term business retainability, which is often the smart business medicine. There is no guarantee of 100% recovery in the unstable economy but it can prolong the life of a business during rough economic times or at least give the business owners a more realistic view into the future of the business, and help them plan accordingly.
During my business mentoring and counseling sessions with existing small business owners, I assess the business operation, management, personnel, experience, product-line, service, marketing strategies, and more. As part of replanning and restructuring the operation, I suggest the owners redo the expense budget for the next few months based on the most recent financial data and seasonal earnings. Reassess every function of the operation. Reanalyze the market. Reevaluate personnel and administrative services. Consolidate areas of operation and services. Modify service and product-line based on the products and services of demand. Revisit lease, vendor, distribution, supplier, sales and service agreements. Although every business is different, the goal is leaner overhead and a refreshed line of products and services based upon the ongoing and seasonal demands. Enhance customer outreach programs and track customer-returning strategies based upon the service, products and marketing strategies.
If you know what worked for you at times to grow your revenue, strategies that helped you establish a more effective operation, and at times steps you implemented to overcome various business challenges then take all of those results and experiences under consideration to help assess and create a better business road map. Synchronize your plans and strategies by writing, rewriting or updating your business plan.
Consistent maintenance of a business plan will refresh an entreprenuer’s business vision, and help improve the success rate. Give your business a longer lifeline with up-spiral projections. A business that can make it through the rough economy with proper planning has only one way to go when the economy revives, and that is to grow.