Refresh your business plan to reach 2022 goals

By Emanuel “Manny” Tocco, Citizens Regional Business Banking Director

Since the pandemic, 67% of companies are creating business plans more frequently than ever before, according to data analytics firm Prevedere.

December is National Write a Business Plan month, so now may be a good time to update your company’s plans for 2022.

You may not feel you have the time to look a month ahead, let alone a quarter or a year. While that’s understandable, the current dynamic business climate makes it imperative to have a roadmap for how you’ll reach your company’s goals.

Use these five tips to update or create a strong business plan.

1. Gather a variety of opinions. CEOs and presidents typically craft company strategy, but most businesses benefit from adding other voices to the mix early in the planning process. Building a strategy based on a broad set of perspectives works better than asking for input to a plan after it’s complete. Involve people from financial, sales, marketing, customer service, human resources, and procurement departments, as well as anyone else who can broaden your perspective.

Also, consider assembling a group of outside advisors who can provide an objective opinion on your plans. This could include your accountant, attorney, banking partner, or clients and customers. Honest and new views on your strengths, weaknesses, opportunities, and challenges are important for you to make the most informed business plan.

2. Evaluate your market. Did your company adjust its products or services in the last year, or start selling via new channels? Whether you did or not, it’s prudent to assess current customer needs and market trends. This effort will ensure that your messaging and channels are focused on the most promising targets.

Changes in the competitive landscape should also factor into your company’s planning. Your set of competitors may have contracted, creating opportunities for your business. Or, new players may have emerged. Examining your current competitor set and how you’re differentiated to succeed in it should shape your plans for new products, marketing, sourcing, and other company details.

Another part of refreshing your company roadmap is evaluating supplier and vendor relationships. If you’ve traditionally used a just-in-time inventory management model, where materials arrive just before you need them, competitive pressure may require a new approach. Supply chain issues could disrupt your production schedule, ultimately damaging sales and the customer experience.

3. Review your profitability. Have your sales, costs, and pricing changed in the last year? If they have — and for most businesses, this is the case — you’re probably facing profit margin pressures that you need to address.

Look at the financial terms you’ve negotiated with both your customers and vendors, and determine if they still work to support your short- and long-term profitability. If they do not, or they leave you perilously close to a financial shortfall, consider taking immediate action.

Economic pressures are discussed in the mainstream media every day, and businesses should not ignore this. Be open and transparent with your customers and partners about what’s happening in your sector. Perhaps now more than any other time in business history, people understand the need for price increases.

4. Take stock of your team. Do you have the staff bandwidth and in-house expertise to go into a new market? The skills and roles you need to achieve the goals in your business plan may not be what you have today.

The labor market is currently challenging, and many companies are having difficulty filling open positions. Whenever possible, promote from within, or retrain to find the talent you need.

If you don’t have the needed people in-house, it’s important to familiarize yourself with the current hiring landscape so that you’re in a competitive position to attract top talent. Post-pandemic, many people are thinking more about quality of life and want more flexibility and autonomy in their professional life. You’ll need to determine what you can offer to attract the people you need.

5. Determine if you need financing. Do you have the necessary cash flow to take your business to the next level? Business objectives can stall when the funds needed to proceed fall short. Your business banker can help you review the cost and repayment terms of different types of financing solutions to see which is best for your needs.

What works for your business depends on many variables, such as if you’re in a growth phase, or if you have a lot of fixed assets, such as real estate or heavy equipment.

Your banker can help assess whether, for example, a line of credit, where you only borrow and pay back what you need, would be helpful for short-term or seasonal needs. Or, you may need a term loan for larger purchases.

It’s mission critical to understand your capital expense budget for the next year and have the financing you need to meet your goals. Talk to your business banker to learn how they can help you meet your business goals in 2022 and beyond.

Emanuel “Manny” Tocco is a Citizens Regional Business Banking Director. For over 15 years, he has helped small businesses grow by providing necessary debt capital at varying stages of their life cycle, as well as treasury management tools to enhance customers’ cash flow visibility.