Well done you’ve completed your business plan. Were you influenced by others opinions or focus on what is best for you and your business? Did you think big, dream about the £10M business but in your heart (and reality) know that’s not what you want?
Time for a sense check. Is it really the right plan for your business right now? For example, you may have a turnover of £100,000 with 20 clients but suddenly you have a plan to get to £1,000,000 turnover. On a straight-line projection that’s another 180 customers.
Can you find them, if so where? Will they buy what you have? Do you have enough product or resource, do you need more staff and desks and computers…? Can it work? Can you make it work?
There’s lots of way to get to £1M turnover….
Sell 1,000,000 for £1
Sell 100,000 for £10
Sell 10,000 for £100
Sell 5000 for £200
Sell 1000 for £1000
Sell 100 for £10,000
Sell 50 for £20,000
Sell 10 for £100,000
Or sell 1 for £1M!
Check your monthly sales targets. If you decided on 180 new customers in the next 12 months, that's 15 every month. You’re at 20 right now, so in the first month you will almost double customer numbers, does that make sense?
Will 15 new customers arrive every month? There's usually a two-week shutdown at Christmas and in the summer holidays: 11 months of sales opportunity and so 15 sales need to be allocated to another month. Now you have different new customer targets for several months. Does that work, will you be able to cope?
Sense check the marketing plan.
I'm a big believer in a zero-marketing budget particularly if you can leverage recommendations referrals and great reviews. But there are occasions when you do need to spend money. Once you’ve created your marketing plan with lots of new brochures, new product launches, events, exhibitions, seminars, etc add up the cost. Can you afford it and can you afford to do it at the time that you want to do it?
Sense check your cash flow. Every business should have six-month cash flow forecast. This shows your cash position but only if it was is regularly updated. Ask when will you run out of cash? When can you afford to buy a new piece of machinery? Sense check income, will it really arrive when you think it will, what about bad debts?
Sense check your business every day or week.
Rory Sutherland in his book Alchemy (a brilliant read I gave it 10/10) talks about no sense as opposed to nonsense. Just because something makes no sense doesn’t mean it nonsense. If you don’t sense check you’ll never know.
Please be bold and adventurous when writing your business plan. But once written (in draft) take time to sense check it before you implement.
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