Part 1
Part 2

sounds like a plan

In this article in his series addressing how retailers can generate more profitable business, Mike Court, managing director of business growth specialist Conexus International, explains why you should be making a business plan for 2008

More than 80 per cent of businesses don’t have a business plan and many of those that do profess to have one, only have a financial plan but not a business plan.

According to Albert Einstein: “Insanity is doing the same thing over and over again and expecting a different result.” That should make you think about the importance of an annual review of your business plan and the results you want for next year. And to achieve that, you will need to do things differently.

First, look at your market information, and you probably know more than you think. Ask yourself, what’s happening in your market? What are the growth opportunities? What are the risk areas? What are the buying group opportunities? How are your competitors changing? And what are the customer trends?

There are also political issues, such as the Government’s targets for three million new homes in the next 12 years – are they planned in your area?

You next have to define your strategy. How do want your business to be perceived? What do want your product mix to be? What do want your customer profile to be? And who will be your supplier partners?

The plan will need a short statement of the vision you have for your business. A really easy way to think about this is to imagine if you could hear some suppliers talking to some of your customers about your business 12 months from now – what would you want them to be saying?

Once you have your strategy in place, you must start a review process and analyse the results. This should look at turnover and profit, when it was achieved and with which products. You should also count how many customers you won and what the average selling price was. And did any customers buy more than once?

You can then look at activity analysis. This should include press advertising, product promotions, mail achieved. You should also score your staff on their product knowledge and sales skills, and apply a similar approach to management skills, financial understanding, customer knowledge, business planning, competitor knowledge and marketing.

You will now have a detailed record of the result you achieved, how you achieved it and the current level of knowledge and skills within your business. Remember, if it’s not measured it cannot be managed.

It’s now time to start planning for 2008 and the obvious place to begin is by planning the result you want. Use the same questions as the review and use the information gained to target how much turnover and profit you want to achieve by product group and key suppliers. Also, set a target for new customers and repeat business from existing customers.

Plan marketing and sales activity that will help achieve your result, continue to measure footfall and plan how to increase it, and plan co-marketing activity with suppliers and local retailers.

You should also end the year with a competency review of each member of your staff and don’t forget about your own personal development.

Create a monthly/weekly activity and results plan in line with your growth targets and the percentages you achieved last year.

And finally, book a business review meeting with your key suppliers as early as you can, share your business plan with them and ask for joint activity in helping you achieve growth for them as well as your own business.