As 2021 comes to a close, business leaders and managers worldwide are gearing up to create their business plans for the coming year.
- Will 2022 be different?
- What effects would the pandemic have?
- What are the big changes and shifts that have to be recognized?
A new year offers new horizons and great opportunities to re-set, review and refurbish, get rid of things that don’t work, and focus on the things that do. An experienced, knowledgeable financial advisor who stays updated on current trends can provide you with the right inputs.
The pandemic has allowed businesses to realize that adaptability and durability are qualities that have helped them weather the storm, and if they’ve survived, it’s because they leveraged these aspects. Business plans have to evolve, adapt and take advantage of new realities.
Keeping that concept in the cross-hairs, it’s useful to take a quick glimpse of the idea of the business plan.
What Are Business Plans?
While many legacy businesses and traditional enterprises evolved without clear road-maps and business plans, today, to start a business without one would be counter-productive.
The business plan is a document that enunciates how it plans to achieve its financial, marketing, and operational goals. These plans offer strategic solutions to issues that the business will likely face as it grows, expands, and sustains itself. The plan also describes your products and services, pricing and positioning, target markets, and expansion plans for the future.
Business plans are especially important when it comes to attracting investment. Whether you approach traditional lenders such as banks and financial institutions or venture capitalists, or angel investing, you need to provide them with enough information to justify their investment and convince them that this particular investment would be a sound one that will give them the expected returns.
Plans can be of significant value to technical start-ups that don’t have a trading history or businesses that plan to enter markets in which they have no experience.
Having a clear plan can also help the promoters to get clarity on their own goals and aspirations and how to achieve them.
They usually follow a set format:
- Title page
- Executive summary
- Description of business, products, and services
- Tools, equipment, software etc. required
- Marketing strategy and positioning statement
- SWOT analysis
- Operations plan for day to day running
- Financial plan and analysis
- Projections for the future
Pros and Cons of Business Plans
Business plans can help to:
- Provide a clear road-map for the future
- Prevent making ad hoc decisions
- Reduce stress and confusion
- Allow investors to know that you have a strategy
- Allocate resources properly
- Bring all actors on board
- Get a line of credit
- Identify your target markets
- Maintain your strategic focus in good and bad times
On the flip side, business plans:
- May not always be accurate if not created by experienced professionals
- Can focus on too many details
- May not provide accountability
- Can fail if implementation practices aren’t in sync
- Can restrict your adaptability and freedom to innovate
- Can become outdated and obsolete very soon
How To Prepare Business Plans For 2022?
Align With SMART Strategy: Work on your 2022 business planning with a strong foundation of SMART strategy. This means your goals should be Specific, Measurable, Achievable, Relevant, and Time-Based. The appropriate strategies can back these goals. For instance, your plan may say that your market share will increase by 20% in 2022, or your billings will be X by the end of the financial year.
People Focused: The pandemic has created huge gaps in talent as people have moved, restructured their personal goals, suffered financially, physically, and emotionally. The US Department of Labor estimates that 11.5 million workers quit jobs between April-June 2021, resulting in massive operational problems for small and medium businesses. Business leaders need to take these issues seriously and address them in ways that are more people-focused. Helping your staff to tide over bad times earns greater loyalty and better productivity and growth. Providing upskilling/re-skilling avenues and encouraging corporate social responsibility in your company helps to show that you’re a company that cares.
Pricing Strategy: Once you have defined your target market accurately, you can align your pricing strategy correspondingly. This would also dovetail with the way you market your products and services. Use better analytics to give you real-time information on your customers, their tastes, preferences, and budget.
Social Media: Surveys show that more than 54% of the world’s population (4.2 billion people) possesses a social media account. More than 48% of people use social media to research products, and a large number expect companies to offer products and services via social media. 95% of adults who have social media accounts have connected with their preferred brands/businesses on social media. They look for recommendations, reviews, product information, and company information on social media. Ensure that your business plan takes this aspect into account by creating a clear social media marketing strategy.
Technology: Ensure that your business plan describes how you will strategize technology into your operations, marketing, and goals. While you don’t need to delve too deep into the nuts and bolts, showing how tech will make the difference is important. You may have slightly different plans for investors, outsiders, owners, and stakeholders, etc. Ensure that these plans describe tech in the relevant and optimal way that each sector can understand it. How you plan to deploy software, tools, communication, financial packages, ERP, etc., can be documented clearly in your business plan for 2022. For instance, 2021 saw the Boom Of Zoom. These and other strategies, such as the new order of Work From Home, have to be accounted for in your new plan. Training and skilling have to march in tandem with these plans. Complete your digital transformation plans.
See The Bigger Picture: More than ever, 2022 business plans have to recognize the new reality. Your business has to strategize for global but think local. With Covid-19 breaking up plans for travel and shipping, businesses have to adapt to survive in the local/domestic market. Digital marketing statistics show that more than 90% of customers look for a business locally before exploring wider fields. Another important aspect that you have to recognize is that employee priorities have undergone dramatic changes. Today, quality of life, safety, and work-life balance are the priority. Nearly 40% of workers who work remotely today would consider quitting their jobs if forced to return to regular office work.
Your business plan for 2022 would contain the core elements of a regular one, but it has to consider current realities if your business is to survive, grow and succeed.