Creating a New Business Plan in Uncertain Times
With the economy in serious flux due to the COVID-19 pandemic, small businesses are on the brink of collapsing while large companies are short on financing. While some companies and market niches continued to perform through this, most businesses took a serious hit. However, just like any other challenging time, you should plan to continue your business with new and better plans. That said, consider the following when creating a new business plan in uncertain times.
It is important to base your business plan on this year’s blueprint. As such, you may be making more “save as” or reiterations of strategic efforts than previous financial years. While you work out the change in growth, your business activities may remain the same. However, you shouldn’t adjust your financial targets in the coming year without considering the prevailing business environment.
Therefore, as you create your weekly, monthly, quarterly, or annual business plan, consider the following basics;
- Is your niche growing, treading, shrinking, or becoming obsolete? The answer to this can guide you if you need to reinvent or continue with your business model.
- Who are your target customers in the next financial year?
- Are target customers spending more on your products or alternative products that you can but aren’t promoting?
- Do staffing and resource plans match your sales and revenues?
- What is the nature of your sales? Are they one-time deals or recurring customers? If they are one-time deals, perhaps consider contractual employees over full-time employees.
Consider Changes in Customer Behavior
Regardless of your business model, you should base your 2021 business foundation on whom you think your clients will be. While they could remain the same in some business models, other businesses will have to remodel to attract a new customer base. Forecasting customer behavior is among the reasons why most B2B businesses opt for an account-based marketing strategy. This strategy concentrates on selling products to existing customers more than marketing to a general audience.
Changes in customer behavior will determine your business account trajectory, whether it will be increasing or decreasing. It also influences the potential for cross-selling, the nature of competition, and more. For entrepreneurs running B2C businesses, your business plan should focus on specific segments. For instance, local businesses should focus more on referral and customer retention programs. This is a perfect focus for when updating and creating a new business plan during these uncertain times.
Consider Changes in Work Habits
The pandemic significantly changed how people work, with some of these changes possibly cascading well beyond the pandemic. The virus eliminated some tasks and rearranged the work environment completely. Significant changes include shifts from routine work to creative knowledge processes, remote working models replacing static physical offices, and creating workspaces that satisfy new guidelines. These are some crucial changes to consider when creating your business plan.
Verify your Financial Model
During these uncertain times, your business plan should remain agile. Most enthusiastic businesses are on hold until the government finally opens up the markets. However, this might never happen, as the resumption of normal activities proceeds in a fluid state. There may be no clear deadline of when businesses can resume operations as before. Therefore, as you create your business plan, include both short-term and long-term forecasts.
You should also frequently evaluate your long-term financial progress. Most businesses constantly evaluated and revised both fixed and variable costs during the pandemic due to the hard economic times. Similarly, as you plan for the next financial year, fix your costs on business practices that you strongly believe in. Use partnerships and innovative options in areas with variable costs as you rebuild the business’ balance sheet.
These points for creating a new business plan in uncertain times are a great place to start. Strategic planning and forecasting revenue are among the challenging disciplines for businesses, especially in periods of uncertainty. The ongoing pandemic has made it impossible to predict the future business environment and plan accordingly. Therefore, as you revisit your business plan, step out of your comfort zone, and consider the current business environment.
Looking for help? Tired and believing there has got to be a better way?
Let’s talk about your business. With over a decade of experience leading companies and transforming lives, and a Master’s degree in Org. Development and Leadership, Mike can help you find the best way forward!