BUSINESS Business planning for SMEs

Holding vision in a small business


In the first of three articles on business-planning tools for small businesses, chartered accountant
Bríd Conroy describes how to monitor success and build on it.

Money Matters
Brid Conroy

It’s been so easy these last few weeks to get disillusioned with the state of our economy. That feeling of ‘Is there any point?’ was beginning to creep in. So, I decided to distract myself with a trip to the hairdressers. You’ll be happy to know I sometimes follow my own advice, and I hunted out a bargain. I went to a new saloon to avail of its €20 opening offer.
I got a great haircut – but more than that, I got inspiration. Here was this lovely young girl following her instinct to open her own business, not thinking about what will happen when the budget cuts kick in and the two Brians have moved us all ‘forward’. She was just doing it.
However, it also struck me that success in business starts with this drive and energy. But to sustain it, it needs regular planning and sometimes a helping hand. Think about multi-national companies and all the different disciplines they employ to make their business a success – finance, marketing, sales, IT and so on.
While it’s not viable to employ all those resources in a small or medium-sized business, it is however a good idea to spend a little time every month reviewing and planning where you are going. Over the course of my next three articles, I will give examples of tools you will find useful in business planning.
To start with, lets go right back to basics and look at why you are in business? What do you want from your business and are you getting it? Take a sheet of paper and divide it in three. First, list the top 5 things you want from your business, like how much profit you want to earn, job satisfaction, how many hours you want to work, your work environment etc.
Secondly, list down one way of measuring success for each of those five things. For profit it might be a monthly review of costs and sales. For a lifestyle change it could be one afternoon a week with the kids. For job satisfaction, you may need to spend some time thinking about what that really means for you. It could be expanding into new areas of business, spending less time behind the desk or just feeling more enthusiastic. 
Thirdly, look back at the end of the month and review how you got on. Applaud yourself where have you’ve been successful and for those areas where you didn’t quite make it, list just one thing you can do in the next month that will set you on the right path and stick to it.  For your profit target, there is a little check you can do to focus yourself. See my example below of a Shoe-shop. I start with the costs that have to paid every month, add the profit required of €5,000 and work out that 425 pairs of shoes will need to be sold. Is this realistic, and how many were sold last month? Can costs be cut to reduce the number of shoes that need to be sold?
Try this for your business and see what it reveals. If you struggle to find a little time to do this, just think of the time or money you might save in the long run. Ask a friend or spouse to help, someone who may offer a fresh outlook.
There is also help available from government bodies like South West Mayo Development Company, who offer 75 per cent grants for Analysis and Development and 100 per cent for training deemed eligible. Mayo County Enterprise Board also offers training support for little or no cost.
With the New Year fast approaching and the threat of doom of gloom about the place, there is no better time for a fresh outlook. Your business is just that, yours, and it really does pay to plan ahead and ultimately to hold on to your vision.