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Why Plan When Nothing Goes To Plan?

If you fail to plan you plan to fail

There is often a great debate about business planning.  Planning is key to business success versus a go with the flow attitude since nothing ever goes to plan anyway.

Benjamin Franklin is famously quoted as saying “if you fail to plan, you are planning to fail”.  This can be interpreted many ways but I like to think it means that if no effort is made to map out the road to success then there is no chance of achieving success.  There are theories that Benjamin Franklin meant we need to learn from our mistakes and I think there is merit to this as well.

Life has a way of happening and not a single person on the planet can control everything that happens. People get sick, economies change and our customers decide their tastes have changed. So why plan?  If we really and truly believe we have no control over all aspects of our business, then what is the purpose of a business plan?

Because you do have control…

The first initial business plan you ever make is a daunting and confusing task but an important one. If a business person has considered everything involved in setting up their business and how they plan to take that business to market they should end up by the end of the year, not too far off what they thought would happen.

You see a good business plan, including your first ever business plan should set out your financial goals and all the steps to get your there and it will look at all the things that may affect your business and develop contingencies around them.  The business plan will include what will happen if you get sick or you and your business partner have a blue and decide to part ways or if your business place burns down.

Your business plan will include a good understanding of your customer base at that time and the next year you will look at your customer base again to see if you’re still on trend and relevant.

A business plan has no merit if it is not actually applied to the business. This means actually tracking the results of your business and seeing how it fits with your initial plan.  Quarterly is the recommended period of time between reviews but really looking at your financial results weekly is best and mapping it back to your plan quarterly will keep you on track.

If you can see your results don’t meet your expectations in your plan, then that is the time to deep dive into your business and see what’s happening. Are you actually applying to your business what you said you would do in your plan? Is there something in your plan that needs reworking or ditching altogether?

Did your initial ideas about the business and where you are now change at all?

It’s completely fine and necessary to adapt your business plan along the way.

Let’s look back and reflect on what Benjamin Franklin said, ‘if you fail to plan, you are planning to fail’ and its merit.  If you decide not to plan out at least your year ahead and where you want to go, your business is being reactive and dragged around theoretically by the hair.  There really shouldn’t be a situation you haven’t catered for in the event it arises expectantly.

After the first year your business will have considerably more clarity and direction and your product or service offering will be more targeted and directed to your desired audience.  Lessons will have been learnt and incorporated into your business.

If you’ve launched into a business without fleshing out and researching whether or not you actually have a profitable business through a business plan, chances are you don’t have a business.

I sit on a Sounding and Advisory Board with a TAFE Institution here in Melbourne for Certificate IV Small Business students.  On these Boards we advise and direct students and assess their business plans at the end.  By the end of their course students will have a solid business plan they can work from and take to financial institutions when applying for loans.

Often by the end of the course many students have left because they’ve worked out through the process, they don’t in fact have a viable business idea.  Many haven’t thought through or considered many aspects of building a business and realised through the process of building their business plan that it is, in fact, a very complicated thing to do.

Consider the consequences had these students not gone through the planning process.  Imagine if they had taken the attitude of just going with the flow and seeing what happens. Chances are, not much except perhaps losing their money as well as their pride.

For those who have determined they do in fact have a viable business through the planning process it will absolutely help them as their business grows and prospers.

Nothing should be left to chance…

How a well thought out marketing strategy saves you money and pain

How a Well Thought Strategy Saves You Money

 

For the first time last week I heard a phrase from a friend called “machine gun marketing” and I thought it really hit the nail on the head to describe how some businesses go about utilising their marketing dollars.

 

The premise of machine gun marketing is when a business haphazardly spends money on marketing activities with the idea that any marketing activity will hit a bullseye and bring in money. There didn’t appear to be much thought around why the activity would bring more revenue.

 

There are some questions businesses should ask themselves when they are considering where to put their marketing dollars when building a solid strategy.

 

Question 1 – What is the entire process involved with each activity?

 

When you are approached by a business development manager who wants you to invest in their service, be sure to ask them exactly what is involved.

 

For example, you’ve just bought a space in an industry magazine and you’ll feature in the next edition. Besides the cost of the advertising space, what other associated costs are included? Do you need to provide the advertisement itself? That means images, copy and graphic design to put it all together in a way that looks good and is the right file size for the publication.

 

So now we have the cost to either use a photographer or buy a stock image. As well you also need to consider what to say and how to say it? What’s your pitch?

 

Do you have all the suppliers you need to create this advertisement? Where would you start looking?

 

Now it’s not just the cost of the space for the advertisement, it’s the photographer or stock shot, copywriter and graphic designer. Often there are more costs associated with the activity you’ve just bought.

 

Question 2 – What are the anticipated financial returns for you invested marketing dollar?

 

Can the supplier of the marketing or advertising service tell you on average what sort of business return their clients receive? Every business operates differently and has different expectations. For example a large corporation may anticipate a 2%-4% take up for a direct marketing campaign which is acceptable because their large number of clients means the return on investment is high.

 

This kind of take up for a smaller business may not be feasible. It is important to ask some questions around average returns businesses may gain from participating in a particular marketing activity.

Question 3 – When should I do a marketing activity?

Businesses often have an annual cycle. There are peaks and troughs throughout the year so when is a good time to do marketing activities?   During the peak times you may want to maximise the opportunity by placing an ad or making an offer but conversely some activities may really help the troughs in your calendar year to make it more bearable.

 

It’s a good idea to create a 12 month calendar and plot in when you would complete marketing activities. This means you can set your budget and have finances ready to go and it helps with anticipating cash flow.

 

Question 4 – If I’m doing a new activity should I go all out or maybe sample it first?

 

A lot of large organisations will run a test campaign to iron out any teething problems with a new marketing activity. I remember one organisation I worked for referred to the recipient of a direct marketing campaign by their first name and the take up was poor as a result.

 

Using the feedback from the call centre they realised this problem and rectified it. The take up changed from 6 new clients per week to over 200 per week as soon as small changes were made to how the customer was spoken to.

 

Testing the market with a new activity will show whether or not it’s something worthwhile continuing with, axing it or making some slight alterations.

Finally…

 

A well thought out marketing strategy can save businesses a lot of money and pain. Throwing marketing dollars in a “machine gun” approach generally means a lot of money is spent unnecessarily into activities that produce little or no financial results.

 

Think through the whole process and look at the year ahead. It’s a great way to set budgets and set up expectations.

 

You’ll find your results compared to what you planned will probably be close.

 

To discuss further please contact

 

Christine Gaynor B.Bus (Marketing)
Director
0478 114 058
enquiry@citrinegroup.com.au

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Smart Business For All Business

Smart Business for All Business

Getting your business up and running is an achievement in itself but how does a business owner navigate their way when their business is growing?

Planning is they key…

At the beginning of every year or financial year, spend the time planning your financial goals for the year ahead and what you are going to do to achieve them. Big business do it and it works.

Below are just a few activities large business use to stay relevant in a competitive market place and it applies to all businesses.

Know your audience

When you think about who you’ll be doing business with who do you see? Understand what your target audience like about your business or don’t like about your business. Even successful businesses who seem to be thriving sometimes don’t actually know why they are successful or what it is that brings people in the door and if there is a change in the marketplace, business performance can change as quickly. Ask.

Pricing

What price do I charge for what I am offering? You may think you’re worth a million dollars but what does your target demographic think? After all without paying customers you’re not worth anything.

What is it people get for the price they are paying? Without going into a price war with your competitors consider what price point you can charge that will cover your costs, bring in a margin and that customers will tolerate.

Point of difference

When a customer chooses your business over any other there’s a reason. There was something you had to offer that your competitors didn’t have it’s important to understand what that is. This doesn’t always have to be about price. Your business might be attracting a certain group because they really relate to what you are offering. You might be a café where cyclists love coming to or you might be a food van with a twist on the menu you offer. Clients get along really well with their accountant and trust that person.

Marketing Plan

Over the next twelve months what activities will your business do to stay relevant in your audience’s mind? Knowing the peaks and troughs through the year helps you determine what activities you should you plan to help support the quieter times and how to maximise the busiest times.

Working out your activities the year ahead and understanding exactly what’s involved, how much they will cost and also anticipating what the financial returns to your business will give you control over the direction of your business.

BENEFITS

The benefits of having a plan for at least twelve months is that you have control of your business and how it’s going to get there. If you’ve researched and analysed the plan well enough to understand what’s involved and how much it should cost there shouldn’t be too many surprises. Naturally things come up you can’t anticipate but you can always adapt your plan to take changes into consideration.

A business plan will also nut out the activities that work in generating revenue and weeding out those that don’t and should be discarded.

Putting a cost to all the activities involved in your plan is important as is forecasting your returns. What will all your efforts bring you if you understand your business well?

Sometimes your business just has some key areas that are problematic or need a shake up and this still requires good analysis and strategic planning.

Lots of work above and beyond running your business day to day but worth the effort.

How To Market To Your Target Audience

Today I had coffee with three professionals like myself and the discussion came up around how to market our businesses which was really interesting. Included today was an accountant, a bookkeeper and a financial services operator. Each of our requirements regarding how we attract and find our target audience varied particularly because two of the participants were part of a franchised business.

The discussion of the need for a business plan arose and for the two operators who were a part of a franchise, they didn’t have a huge concern because their parent organisation already had one but for the other participant there was a question around whether or not she needed it.

“What you really need is a marketing plan,” said a franchisee which I thought was interesting. When I explained that absolutely a marketing plan was required, but only as a part of a larger plan it seemed a little confusing. Setting business goals was the primary activity I explained. For example, if she wanted to achieve 500 new customers in the next year that would attract say $20,000 in revenue, she would need to determine what activities would be required to achieve that and also assess the cost of the activity and assumed returns. Some of this might in fact be through marketing activities but to assume all new business would be achieved this way was a little short of the mark.
The group discussed how to network, where to network and what to do if you were someone who found it very difficult approaching prospective clients cold. A franchisee explained her parent company gave her a long list of various marketing activities she could use and the advice in return was to pick an activity that matched her strengths. Direct Marketing and cold calling have a very low strike rate given the number of prospective clients approached.
Networking events were given a positive nod as a way to find advocacy and utilizing people we already knew who could vouch for our expertise.

The other point that came of this morning’s coffee catch up was that many operators do in fact have a business plan that sits in the desk gathering dust unless someone gives them a poke to get going and take action.

I found this very validating since one of my service offerings is to assess the actual results to what was planned and make sure my clients are on track.

It was an interesting topic and i was pleased that I could shed some light on what it means to have a good business plan and have the right business coaching along the way..