5 tips to revive your business plan in 2022
We all have that New Year’s resolution, to eat healthier, get fit, and save money. Whatever the goal may be, it is essential to have a plan. Planning helps map out your course of action so you can accomplish your goals with manageable steps.
For a small business owner, the same principles of planning can ensure the growth of the business. A business can really benefit from having a structured business plan in place. Planning will also allow a business to have all the necessary preparation, stock, staffing, marketing, and finances in place.
Most businesses will have the normalised components of a business plan, including an introduction, executive summary, what products and services are offered, marketing campaign strategy, financial aspects, and a budget. We created a list of things you might want to include in your business plan.
Let’s explore 5 things you might not have considered yet as you start your business planning for 2022.
1. Build in flexibility
The ability to adapt to your surroundings in an ever-changing market is important. Especially during the COVID-19 lockdowns, the business world learnt to be adaptive and flexible. Restaurants adapted their menus to cater to takeaways and deliveries. We saw pubs and clubs bottling cocktails and travel agents promoting virtual tours of cities. These creative initiatives were not likely a part of their initial 2021 business plan.
Take the time to think of creative ways to continue receiving cash flow in case of any unplanned events. Assign team members responsibilities to different projects in the road maps, you can even have a planning day where everyone can come up with ideas for when things go wrong. Develop a roadmap of continuous improvement planning. Rather than having one business plan that doesn’t get changed throughout the year. A business can also benefit from being open to adopting a new form of technology whether it be an app to help automate processes. Technology can also help you respond flexibly to changing environments.
2. Be prepared with extra cash flow
A continuous business plan will include monthly forecasting as opposed to annual forecasting. Monthly forecasting is a way to determine finances over a 30-day period including sales, production costs, profitability, routine expenses, and your overall balance sheet. There are several loan options available to borrowers that can increase their chance of financial success and recovery if sales are to ever take a hit or if you simply want to put money back into the business to grow. These include a business overdraft, a line of credit, or a secured or unsecured small business loan.
A great option to ensure your business has cash reserves and can maintain business operations could be a Lumi business line of credit. If the line of credit starts at $20,000, the borrower can leave the balance untouched until they choose to access a certain amount. The borrower will only pay interest on the amount debited and the remaining balance will stay available in credit. Once the borrower repays the debited portion of the loan, the balance will be replenished back to its full amount working similarly to a credit card. This can be really helpful in your continuous business planning.
3. Minimise any unnecessary expenses if possible
If COVID-19 taught us anything, it was to ease your spending and cut unnecessary items. This minimises financial leakages and keeps more cash available to the business. Most business plans will include a profit and loss statement of the previous year. You can use this as a way to look at any expenses you didn’t really need from the previous year and reduce them for the upcoming year.
There are other ways to reduce expenses, such as reconsidering your office space or offering staff the ability to work from home a few days a week. Rostering staff onto separate days could reduce the need for a large office space with high rent and limit spending on utilities and office supplies.
4. Check in with your business plan
Make it a habit to check in with your initial plan regularly throughout the year. Will the goals you set at the beginning still be relevant in 6 months? Setting goals for your business gives the whole company something to work towards. Having realistic and achievable goals in place can set structure. These could be setting a monthly sales target or a plan to expand and open a new store.
For example, a Café may want to expand and open a new store. By completing a detailed plan including the projected costs, they will be able to know what is feasible. We have added some of these into the table below.
|New coffee machine||$8,000|
|New POS system||$5,000|
The Café would be able to look at the table and know they needed an upfront amount of $25,000 to expand their business. This Café could look into a business loan of $25,000, covering the costs of expansion, and repay it in a way that suits them best. Lumi offers loans that are tailored to the needs of small businesses like this Café.
5. Plan to market your business
A business needs to stay in the public eye if they wish to attract sales. Make sure you plan out at least 3 months of marketing campaigns. Get creative with your marketing, keep in mind all advertising spaces including social media platforms such as Instagram, radio/TV, local newspapers, magazines and billboards. Keeping regular and consistent communication with your current and potential customers will keep your business front of mind.
How to apply for funding?
With the many loan options available today from Lumi, acquiring the funds needed to improve your business has never been easier. The application process is simple, fast, and can be done online from anywhere, even the convenience of your own home.
What you would need to apply is:
- Have a registered Australian Business Number
- Have income statements and proof of sales for at least 6 months
- Determine which loan is right for you e.g.: a line of credit vs. term loan
- Business plans and future projections on sales