More than ever this year, because of the Covid-19 pandemic, and the chance may people have had to gain some life perspective, increased numbers of entrepreneurs are starting their own ventures. When you are staring out in business, some diligently spend time putting together the perfect business plan to make sure they have thought about their products, prices, place, and promotion. Others simply fly by the seat of their pants, launching on gut feelings and blind faith with some form of plan formulating along the way. Having a good business plan and staying in alignment with your business plan can make a huge difference to your business’s progress, however it is often easier said than done.
Business plans are great for keeping you on track, making you accountable, and giving you a benchmark to begin to measure your progress throughout the year. If it is your first business, creating meaningful and realistic targets can feel like pulling numbers out of the air as you have no way of knowing what the future will look like in reality. Here it can be useful to start with marketing metrics, for example, the number of social media posts you want to post to your chosen platforms, the type of content you will create, the amount of money you want to spend on marketing, then work from there.
Before you start, you should know the type of market you are looking to target. Here is your opportunity to set yourself up to maximise your tax efficiency, and/or public appearance. If you are looking to trade online, for example, you might want to appear to be a US company when advertising in America to attract more US clients. This can be done by setting up a US company which can be a separate company to your EU company, where you might want to consider a lower tax jurisdiction such as Bulgaria. We can advise you of the best options for you either at the start of your business journey, or as the business evolves.
Mark Zuckerberg, like most highly successful entrepreneurs, looks at his business plan for Facebook in terms of 1, 5- and 10-year plans. Here is our advice for keeping your business in line with your business plan.
1. Measure your progress
An important part of the execution of any plan is scheduling regular times at which you measure the progress you have made against your targets. Your business plan should include a timeline that works with your financial and marketing benchmarks. It is important that you know what is working and this can only be measured by looking at your metrics.
Analysing these metrics will ensure that you make the necessary changes in your activity to keep your business moving forward in the direction you want to take it. It will also allow you to understand potential seasonal variations and make necessary adjustments.
Be careful when you are setting your targets though. If you set your targets too high, you will be demoralised when you do not reach them. In reality, you are more than likely achieving a great deal so be kind to yourself.
2. Future planning
Your business plan is not just a barometer of success, it is also a map to guide you into potential diversification and expansion. It gives you the resources to plan for injections of cash, from investors or crowd funders, as well as allowing you to plan the decision to use Virtual Assistants or a more private Virtual or Registered Office. It may also be a guide as to when you outsource some of your activities, such as marketing or accounts. Building this into your business plan gives you ample opportunity to carry out due diligence on new suppliers.
3. Keeping costs down and revenue
The most important part of your business, even if it is a not-for-profit enterprise, is keeping costs down and revenues high. The best ways to ensure that costs do not run away with you is through careful monitoring. Business owners should know where every penny of their costs are going, and how specifically each of these costs generate or support revenue. Taking time to plan your business formally also gives you the opportunity to research cheaper means of things like marketing, outsourcing and recruitment. This planning and refining process may also lead you to seeking help from a mentor or business coach.
At Think Formations we can advise you in all areas of business, from putting business plans together, to mentoring, through to the best company set up for you. We can also help with business banking and accountancy services. Get in touch to find out more.