It's that time again: the end of another fiscal year. Time to assess this year's successes and start the annual business planning process for next year.
What does that mean? It means it's time to write your business plan.
Whether you're a sole proprietor or a multimillion-dollar enterprise, you need a business plan. Why? Because it sets the course for the coming year. It defines strengths (and what worked) and weaknesses (and what didn't work). It identifies priorities for the coming year and serves as a guide for your business.
A business plan can be hundreds of pages or just a few. Whatever the volume, however, it needs to contain at least the following five elements.
1. Situation Analysis
A situation analysis defines the current situation, and it must be an objective assessment. It's not a marketing pitch for your clients; rather, it's an honest description of where you are today. Look at revenues from the past three years. How do they compare with those of your closest competitors?
Take a hard look at your strengths and weaknesses. As you evaluate the opportunities in the marketplace, do a SWOT (strengths, weaknesses, opportunities, and threats) analysis to see how you measure up internally. Look at what is unique about your product or service compared with those of your major competitors.
Analyze the main environmental factors that affect your business. At a minimum, take a look at the economic climate in the industry in which you plan to do business in the coming year.