How Small Business Owners Can Spring Clean Their Business Plans
As this year’s notoriously cold and snowy Winter finally heads into its last weeks, small business owners have the Spring to look forward to, which loans them a particular opportunity to reassess their business strategies. Domestically, we have all heard of Spring cleaning our houses, but taking the process a step further to Spring cleaning your business is another logical step for small business owners who want to make the most of the season’s innate sense of renewal. Your business plan should never be completely static as a small business owner, the reason why being that small business owners can be more vulnerable to changes in the economy and their neighborhoods than larger corporations. This means that in order for them to perform at their highest potential, they should stay forward thinking and retain an ability to “roll with the punches”. That’s not to say that you need to re-do your business plan every week, but it does mean that you should review it and revise it at least every quarter. Here’s some steps that small business owners can take when reviewing their business plans in order to dust them off and ensure that they are running smoothly.
It can help your revision by starting with identifying what is currently working well. Self reflection is often quite difficult for small business owners because of the fact that their business represents their livelihoods. Ease yourself in to working on your business plan by first identifying what is working well in your business. Once you have clarified what successes your business is running on, you can work out a macro picture from there, identifying what is holding back the already functioning components you manage as well as what you can tweak to bolster their function. It is important to note, however, that your business’s ultimate goal is to create revenues. If your business is running well, but you are not creating revenues or are losing money, then there is something wrong. Examine price points, overhead costs, and market size and share in order to identify where your business is failing to create revenues.
From there, identify what programs are not pulling their weight or creating loss. The opposite of high function is aspects of your business that create a drain on resources including time and capital. Identifying these aspects of your operation will help you to eliminate waste and potentially re-allocate capital in a stronger way. There are many reasons why part of a business could be under-performing, and there are also many reasons why small business owners might not want to change under-performing areas, including historical performance that they feel will return in time. Be sure to be very honest with yourself, and really look at the numbers to determine whether or not the revenues you could make if your business picks up justifies carrying the costs of a draining program during a slump.
Photo Credit to Peter Hill on Flickr