Business plan

The right way to build your 2022 business plan

Opinions expressed by Entrepreneur the contributors are theirs.

One thing that never changes is the fact that having a good plan is essential for your organization. Even after opening your doors, you will continue to analyze, refine and perfect this plan to improve operations. With the pandemic creating so much uncertainty, making a plan for 2022 may seem more difficult than in the past.

However, there is good news. Sticking to a few key points will take away some of the advantage.

1. Identify your assumptions and biases

Most business plans are built around at least a few assumptions. For example, you can assume that you have to follow a specific set of regulations or that you are the right person to run the organization. One thing I’ve learned in the world of investing is that even though cycles repeat, nothing ever goes exactly as planned. What you assumed might be very different from what actually happens.

Take a look at your assumptions from the previous year. What held? What went wrong? More importantly, why didn’t they hold on? If you can answer this question, you can avoid repeating the same mistakes. If you’ve never made a plan before, try to identify the biases that could create problems. Either way, give yourself some leeway and remember that life happens.

Related: How to build your 2021 business strategy in the face of uncertainty

2. Look at your results

Sometimes your results are very different from those expected. It’s not necessarily because you did something right or wrong, but it could be because there are so many moving parts involved. Look at what you got and let those results give some direction to the business. For example, if you find that people have bought twice as much of a product as you thought – and market conditions and attitudes haven’t changed – then it would make sense to invest more in that product. for the coming year. Be discerning about what really caused your results to know if they are anomalies or real long-term trends for the business. But don’t start out blind.

3. Create Projections

Projections tell people what you are getting into. For example, you could say that you are going to spend $500,000 on advertising or $1 million on project A. This is very attractive to investors and shareholders who want to know that you know where you are going. In one of the companies I created, these kinds of projections helped me find partners. If you are both honest and bold enough, your projections can shape your situation and influence the support you get.

Projections also recognize anticipated problems and anticipate circumstances to keep you prepared. To illustrate this point, when I started a small business in the FinTech sector, I did not anticipate that I would need more funding. I haven’t looked at what would happen if the stock market really took a dip. I just assumed everything would work. When venture capitalists asked how it would work financially in different scenarios, I didn’t really have an answer for them. When trouble came, I had no plan to survive and the business went bankrupt. If I had outlined what to do in different scenarios, I might have been able to keep my doors open.

Always look at your best and worst case scenarios, work with different people across departments, and create projections that paint a realistic picture of the business.

Related: How to Host Meaningful Year-End Vendor Meetings – Virtually

Business plans have to be somewhat fluid because the market and the world are changing incredibly quickly. Be ready to respond and pivot. You can apply these same three points whenever you need to create a plan for your organization. Start early, define who you are and make your commitments. The sooner you can clarify your identity and your intentions, the sooner great things can happen.

Source link