We all want to get around to doing our business plans – some of us want to do it, but it keeps getting pushed down to the bottom of the to – do list. Sales are a force to be reckoned with, complaints came in, and taxes were overdue too so the, now dreaded, business plan got lost in the shuffle.
When I talk to business owners, they often tell me their main concerns are, increasing sales and decreasing costs. Here are 5 ways a business plan can save you money:
1. It will help you stay prepared and focused. When you are are not focused, you can start floundering around with vendors, target demographic, or values. These changes can confuse customers. A business plan can change, however, when you are following a business plan, you are more likely to deviate from the original focus and adjust accordingly rather than completely abandon original plans. For example, if you wanted to open an ice cream shop, you could focus on providing 80% dairy ice cream and 20% dairy free ice cream. If you didn’t have a plan, you might be more likely to change the concept and percentage to 50% dairy and 50% diary free.
2. A business plan can help measure what is working and what isn’t. For example, in the sales and marketing portion of your plan, you can apply a marketing strategy. You can sales projections based on the time and money spent on your marketing strategy. If your strategy is working, you can feel confident and measure your growth. If your sales are lower than expected, then you can try using other strategies that are similar in budget or allocated time to help increase sales. For example, if your ice cream marketing strategy is to advertise by handing out free samples by the beach, you can measure, how much sales increased directly after that strategy and measure it in your plan.
3. A plan can help you plan and see in your expected expenses, the potential cost of running your business. There will be lots of little items that you may forget to include or not realize are unnecessary. You can see in your sales forecast, the potential profit margin and look at ways to decrease money spent in order to make a sale. For example, you may have the cost of the ice cream, the employees, the lease but you may forget to include the bank fees for using a point of sale terminal. Your plan will help you realize the cost by calling attention to your actual expenses.
4. A plan can help you save money by planning how to handle customer complaints and being ready with a company policy. Not being prepared with an operations plan can delay customer relationship issues, create bad morale, and create bad press. When you have a plan in place as to how you will deal with customer complaints, you can decrease how much time and effort will spent on the issue. For example, if a customer ordered ice cream to be delivered in your monthly subscription and the ice cream arrived melted, than you can decide before hand, how you would like to deal with the customer complaint. Will you refund the customer or delight the customer with a surprise? Remember, it costs 4 times as much to acquire a new customer than to keep an existing one.
5. You can plan for “seasonality” or the high seasons and low seasons for your business. For example, if you own an ice cream shop in a market with 4 seasons, you know that there will be a high season and low season. In order to be efficient, you may look at planning for the Christmas gift season by creating packaged gifts, or you may add warm drinks to offset your low season. Perhaps after you see the seasonality, you will decide to introduce a subscription that will have ice cream delivered monthly to your loyal customers.