In periods of uncertainty business planning seems to be the last thing on your mind. You are possibly firefighting daily and worrying about how you will survive the next week, let alone the next twelve months! However, it is when the future is unclear that taking some time out to prepare is essential. This will give a better focus and direction for your business, as well as positioning you in the best place when things become a bit more assured.
Planning is frequently one of those tasks that you have on your list, and because it feels overwhelming it never gets done. But the benefits of creating a business plan far outweigh the effort.
The first step is to make sure everything is as organised as possible. Is all of your filing up to date and has everything been entered on to your accounting system? This system doesn’t have to be an accounting package, it can be a set of spreadsheets, but it does need to be kept up to date. Do you know the year end of your business? If not, for a limited company you can find out by looking at Companies House. For a sole trader, the easiest way is to look at previous tax returns. The start date provides you with a date from which to begin in your accounts and a timescale for your plan. If you don’t have a separate business bank account I would recommend getting one.
To plan successfully you need to set your business goals. Don’t be afraid to think big. Now is your time to state what you want to accomplish. These goals can then be broken down into actions. Think about where your business is now and which direction you want to take it. Perhaps you want to increase your income by 20% in the next year? What do you need to put in place now to achieve those goals?
Give yourself some time away from your business to let your mind wander and ideas will come to you. Ask yourself – Is your structure the most tax efficient? Are you happy with your accounting system? Will you need to go VAT registered? Have you considered your exit plan?
Once you have your plan based on your business goals, you can prepare a budget. This can be for any period you choose but I would recommend a year starting from the first day of your accounting period. Enter all your income and expenditure from your accounting system into the budget. The key to success is to keep it up to date by reviewing it regularly and make any necessary amendments. Remember this is a working document!
Devote some time to organising, planning and setting a budget for your business. And don’t forget to celebrate those successes as you achieve your goals – no matter how small. You deserve it!