A recent SCORE client told me that a competitor had begun offering a modified product that enabled customers to increase productivity and to reduce material costs. He asked for some suggestions to keep from being caught off guard in the future.
Owners of small businesses sometimes get so bogged down in the day-to-day work of their businesses that they dont find the time to see the big picture. They need to make the time to continue the kind of planning and research they did before they started their ventures, in part so they see whatever new technology and processes are coming along that might affect their businesses.
Planning is an ongoing necessity. The environment in which your small business operates changes continually. Opportunities and challenges will arise that are different from those assessed during the startup stage.
How do you find the time to plan? You must work more efficiently by prioritizing your activities, eliminating the low-value or unnecessary tasks, and delegating work to others. Identify employees who can take on routine and management responsibilities. Youll be free to focus on more important issues such as staying current with what your competitors are doing, talking with your customers, and exploring ways to stretch your sales.
Watch your industry. In todays interconnected global economy, any change anywhere can have a ripple effect on any small business. The influences may be as far-reaching as a shift in demand, as local as a new stoplight near your store, or as subtle as an emerging technology. Almost without exception, there is an industry association that monitors supply and demand along with pricing, technology change and legislative initiatives. If youre not a member of the association for your business, monitor its website.
Suppliers are industry specialists. Cultivate your relationships with them. Most sales representatives are aware of the plans of their companies. Make sure you ask them where their companies are headed.
Watch your numbers. Financial statements provide a window into the health of your business. Monitor and analyze trends. Your initial financial projections may be trending in an unexpected direction.
Are current and projected cash flows in line with your industry and local environment? By comparing actual cash flows to projections, you can spot opportunities to improve performance.
Revisit your business plan and pay special attention to marketing. It is the core element of your business plan. Are your promotions producing results? Do you need some professional advice, particularly in examining your marketing message and identifying your target customers? Your business plan shouldnt become a trophy of your startup success. Refer to it every quarter or six months to match plans and estimates with current realities. Reassess your customer base, competition and marketing strategy, and adjust if necessary.
Seek objective input from your key advisers, like your CPA, attorney and SCORE mentor. That will improve your plan, speed up your process and minimize surprises.
C. NORMAN BECKERT Idaho district director for SCORE, the Service Corps of Retired Executives