A business plan is a document that should give you both the holistic and detailed aspects of how your business will perform. Despite this, you can never have every fact put down in there.
There are a lot of variables that go into managing a successful enterprise. After all the business plan itself has to be revisited every now and again, as your ideas get constrained by the real world.
Some of the things that will determine your outcome may not be well put in your business plan but you still have to keep them at the fore of your mind:
First past the post
These days researchers even do simulations to find out therole of luck in achieving success in life. It fits in business because many times it is about being at the right place at the right time. Some women and young people fear the idea of competing because of the possibility of not winning. They will try to get away from all that by saying they set the standard for their life, etc. There’s nothing wrong with that but it is important to know that success as an entrepreneur is, firstly, about capturing markets. That is a race.
Fight against resources
Your market analysis may be well done and lists all the advantages and disadvantages that competitors have against you. Heck, you may even be equipped to deal with new entrants in your area of business to protect all the money you need to make. A key determinant for survival is how long you have something to stand on as the ground sinks beneath your feet. You’re really running against the resources you have – they afford you mistakes. Unfortunately, most don’t have this luxury while others don’t include it as a startup cost at all. It’s represented by the business cash reserve.
Pricing is the knife edge
We once spoke of how a problem is only solved by dealing with the underlying problem causing it. We did. If sales are a problem it must mean that you’re either not marketing yourself well enough or that the price of your service or product is wrong. What strategy is your pricing based on? We would like to know. Price gives out vibes on the quality of your product. It also attracts the “right kind” of customers. Importantly, it determines how much working capital you have.
Revenue can be more important than profit
Wait. It depends on the context, of course. Revenue represents growth. You know that profit margin can be improved by reducing business cost. You can’t do that with revenue. Your small business wants to grow. At the very least, your small business needs to operate and that is why revenue (okay, receipt) is captured in the cash flow statement. You have to compare that to profit which does not always mean cash in hand, if you use the advised accrual accounting method.
Test the limits
As a small business owner, you don’t need to be told that flexibility is one of your strong points. But how far do you test that in challenging the established rules of how business operations should look like? Adapting to many things is the only way to mitigate the risks you listed in your business plan (we hope you did, anyway). Two easy things you can implement to save you money is remote working – commuting is awful and expensive – and outsourcing functions. Networking is not only about the sales end. Use people and don’t feel bad about it, haha.