Custom Install: A New Year is here!
While there is no way to completely predict the future, spending some time as a business owner developing your business plan will help you set your high-level objectives, guide the investment of your time and money, and give you a method to track and adapt your business as 2014 unfolds.
How detailed you make your business plan is up to you. Some companies produce detailed strategic plans covering an outlook of three to five years in the future that span hundreds of pages and are created by planning teams of 30 or more people. Others are drawn up on bar napkins by guys named Bill. The most important element of your plan is not the number of pages, but that it meets the needs of your business, and that it is both actionable and measurable. If it does not meet those criteria, it will quickly collect dust on your desk. For those of you who have not formalized your planning in the past, here are few guidelines to get you started. Adapt them to meet your needs—your plan is your business.
You business plan should start with a look at 2014 from two perspectives: 1) External market factors and how you believe your market will perform (top-down); and 2) The ability to meet the needs of the market (bottom-up).
This is where you will use a mix of external data and your experience to draw a picture of what 2014 will look like. You can use Gross Domestic Product (or GDP—the overall growth expectation for the economy) data as a starting point, which many companies do.
GDP forecasts are available at many sources for free and can be found quickly via an online search. Often the data is made available not only at the country level, but for your state and in some cases city or metro areas. So, if GDP in your market is expected to grow at 2.5 percent in 2014, you can assume your business should grow at the same rate if you are keeping up with the competition. Then ask yourself if you think that there are any major economic factors that would increase or decrease that growth. Are new jobs coming into your market? Are housing values and home sales picking up? Are corporations or local government making major investments? If so, you will need to make judgment calls on how much these should impact your growth goal.
The last components are technology trends and shifts. Are there new technologies or shifts in products that you sell or would like to sell that will help or hinder your sales? Make note of the pluses and minuses of each.
Finally, take a look at the number as a business owner and see if you are comfortable with it. Does 5 percent year-over-year growth meet your expectations for the performance of your business? Adjust accordingly.