Turn your business dreams into reality with this expert advice from Hitachi Capital Franchise Finance
The start of the calendar year is the time when many business owners reflect upon their ambitions and goals.
But how can you turn those dreams into reality? Hitachi Capital Franchise Finance suggests your process should be methodical and thoroughly planned, while reviewing your financial viability.
Failing to plan is planning to fail
Some people set up businesses - or run existing businesses - without a proper business plan. However, many of these fail within the first few years. Don’t allow your failure to plan get in the way of your business ambitions. So what should you do?
Set smart objectives
First of all, you need to set SMART business objectives:
- Specific: ensuring your objectives are focused on what you intend to achieve.
- Measurable: see how well you’re doing and make management decisions that will get you back on course if necessary.
- Achievable and realistic: by all means, show ambition, but explore all angles and make sure it will be possible to achieve your goals.
- Time-based: so that you and your team have a focused time limit to work towards.
Understanding your market and competition
Next, you need to understand your market (both local and national) and the competition within that marketplace. Depending on your product or service, you may have identified a few key customers already, but you should know who your competitors are:
- Who else is offering the same or similar solutions to your prospective customers?
- How are they doing that and what are your competitive advantages over these businesses?
While it’s tempting to believe you have a unique solution to a problem, it’s unlikely. A competitor matrix, highlighting your USPs and how your proposition differentiates itself from other businesses, could be a great way to review your business model.
Your operating strategy and marketing plan
Your operating strategy is how your business works - the logistics behind your product or service that ultimately determines where you position yourself in the desired market. This is to be considered alongside your marketing plan. The best possible marketing strategies are those that test and learn as a target market responds and the proposition evolves. You should have a clear idea of your market and pricing strategies, but you need to constantly monitor and adapt these as you gain feedback.
Assessing your resources
You will need to undertake an assessment of the physical and human resources required. This may include any property, equipment, machinery and the team you will need to achieve your goals. Are your current team qualified to do the job or will they need extra training? Will you need to hire additional team members?
Financial projections and cash flow forecasts
All the above needs to be costed into the financial part of your plan. A monthly profit and loss projection will track progress and ensure it’s worth pursuing your dream, while the monthly cash flow forecast will help you identify whether you can afford to achieve it.
Your projected balance sheet will show you what the business is going to look like in monetary terms in the future, how strong it could be and the degree of solvency that will hopefully give you a safety net if things take a little longer than expected.
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