Before the start of the new financial year is one of the best times to update your business plan. You’re over the start of year rush, and that means it’s easier to set aside the time to actually give the business plan a proper spring clean. Now is the best time to think creatively, and really look at your business and how to tackle the year ahead.
A question to ask when you are updating your business plan is ‘what are some of the things you need to consider?’ More than anything, your business plan should be a clear reflection on where your business is right now, and where you would like it to be in 12 months. It needs to be a fairly comprehensive effort, and something you should renew annually so that it doesn’t become stagnant.
There are a few things you need to consider when making a business plan:
1. Find enough time to properly refresh your plan
A business plan done properly takes time to complete. Make sure you dedicate a realistic amount of time to properly develop it. You can’t expect to get anything done in that 2 hours that you have between classes, or in the 1 hour you have after making dinner and falling asleep at the end of your day! It will likely take days, even weeks, so think about how you can rearrange your day to make the time available.
2. Get started early and ask for feedback along the way
Don’t worry about sharing or discussing your plan with trusted advisors as you are developing it. Don’t worry if it’s not perfect or finished, better to be on the right track. Once you have completed the plan, leave it for a period of say a week, then go back and read over it with fresh eyes. Does it all still make sense? Are there any obvious gaps in your strategy? Any errors in your projections? Is it clear what you are trying to say? This is yet another good reason to do a business plan at the start of the year, as you can complete it before you have business opportunities that call for you to share it.
3. Be clear about what you want to achieve through the business plan
Too many business plans are vague about the intent of the business. Stating “We wish to grow 50%” means nothing. Alternatively,“We plan on improving revenue by 50%, profit by 10%, and opening at least two new gyms in key locations” is a far more distinct goal. The clearer your goals, the easier it will be to create a business plan laying out specific steps to achieving them.
There are a couple of common goals that business plans typically reflect; consider whether any of these are applicable to your own operation.
- Growth in servicesBusinesses that add additional services are able to increase revenue by selling to new customers, or upselling to existing ones. For example, you might develop new fitness programs or begin organising fitness camps as a service. Adding new services typically comes at significant costs in marketing and customer acquisition however, so be sure to factor this into the business plan.
- Increase marketingSmall businesses that don’t have a lot of money often find that as their financial position stables, marketing becomes a highly desired goal. Marketing obviously has the intention of bringing new customers to the business, and the business plan should reflect how many new customers you want the marketing strategy to bring in.
- Opening additional gymsExpanding the business by turning it into a franchise or chain is a dream of many. Unfortunately it’s far more expensive than simply renting a second location. The business plan should reflect the costs associated with hiring and training managers, integrate the financial systems of businesses in multiple locations, as well as address quality control and marketing.
- Financial growthA business plan should reflect the financial ambitions of the business. Critically, it should also explain how the business will get there. If you’re planning on doubling revenue over the course of a year then it’s important to show how you’re going to achieve that. Increasing revenue is no small feat, and won’t just happen by running your business well.
4. Makes sure the business plan reflects a deep level of research
You need your business plan to show that you understand your business. Even if you never show it to anyone else, being able to refer to quality information and research will assist you in your own decision making. To help build your business plan you should research the methods and their effectiveness of your competitors, and you should survey your own customers to work out what they like and would like to see improved in your business. From this information make targets for your own business which are realistic.
5. Understand your financial position
Whatever goals you might have, you’re going to need to be in the financial position to achieve them. If you will need to borrow or acquire credit to realise some goals, then the cost of doing so weighed against the profitability of the business should be a key consideration – you don’t want to be borrowing money for your business at the cost of creating flaws or losses in what you already have!
6. Ask yourselves the following questions
A business plan should address each of the questions below. If you can’t answer any of them in a precise and clear manner, then you need to go away and do further research and analysis until you can.
- What changes to the business do you have to make?
- How much can you expect to grow this year and how will you achieve that?
- What does your audience look like; who are you appealing to and why?
- Do you want to attract outside investment? If not, how can you maintain a stable financial position? If you do want investment, what investors do you want to attract, and what can you do with the business to make it an attractive investment for these investors?
- What state is the fitness industry in and how does your business compare with the other fitness organisations out there?
- What new products and services are making waves in the fitness industry, and should you invest in these trends?
- How well is your management team operating? Do you have any business skills that you are lacking, and if so how can you fill those gaps?