Every business owner should have a specific strategy in order to push the business to greater success.
The plan itself must be a living document that can be easily massaged and adapted as time passes. External factors such as fluctuating economic conditions and consumer trends mean that this plan has to be agile but the essence should remain true to your main goals.
An important part of the strategic plan will be the budgets. It is essential that you structure your financial reporting in a manner that enables you to review all aspects of the business. Having a chart of accounts that logically separates the business into its important divisions and components is a good start.
Your financial results should be reviewed regularly (monthly is recommended) and comparisons made to budgets. Any significant variations should be investigated and the impact on future results assessed. For example, you may have planned to achieve a particular gross profit margin and as a result of your regular monitoring, you find that it is not being achieved. Your research reveals that there is a new competitor in the market that has made it necessary for you to reduce prices in order to remain competitive.
A significant change of this nature should prompt you to review your long-term strategic plan so that you can investigate whether there are other avenues open to you to introduce new products, or seek better buying prices from your suppliers and other options that will enable you to achieve the desired profitability included in your strategic plan.
If you find that it will be difficult to achieve your strategic planning goals you should undertake a thorough review of all business costs and strategies to ensure that your goals can be achieved.
You must keep yourself informed of business trends, new products and new technologies that will have an influence on how your business performs. It is important not to act as a lone wolf, but rather ensure that you are meeting and mixing with similar minded business people. Learning from your peers can greatly improve your business achievements. You might consider joining an industry association and becoming actively involved. In addition, subscribing to online forums and publications can assist in keeping you up to date and ahead of the pack.
And don’t forget that your accountants can be a great source of business knowledge. Having regular interactions with them will ensure that they know what you are doing and are therefore able to assist you