It doesn’t have to take forever to write a business action plan to increase cash flow and profit. It can be a quick and easy process.
THE EASY WAY TO WRITE A BUSINESS ACTION PLAN
This is the simple action plan I used to grow and develop my small business into a very profitable company. It can be easily adapted to suit any small business.
I wrote a new action plan for my business before the start of each new financial year. Using my plan, I moved the business forward every year towards my ultimate goal.
I’ll show you every step I took to build my business into a valuable asset. An asset that someone wanted to buy.
TO GET STARTED ON YOUR BUSINESS ACTION PLAN, YOU’LL NEED:
- The thoughts and ideas you have after completing your recent SWOT analysis: (Your overview of the opportunities you’ve decided to pursue)
- Ideal/rough growth in sales numbers you want this year.
- Ideal/rough $$ profit you want to make this year.
- Current financial results: sales, expenses and profit.
- A quiet room to concentrate on your business action plan.
- A pre-prepared business action plan excel spreadsheet (available below)
2 WAYS TO MAKE THE PLANNING PROCESS EASIER
- Have an objective supportive person with you. Ideally with experience in Excel. (although it’ll work well even with lined paper and a calculator)
- Use an image projector to make things clear and easy to see. (if you don’t have one, hire, borrow, beg)
Using the Business Action Plan Excel spreadsheet, I worked through the planning process in a quiet room with my Finance Manager.
As I thought about what was possible for each month, the Finance Manager entered those figures in Excel which we projected onto a wall.
Firstly we entered the sales figures that we thought reasonably achievable. Then we entered the corresponding ‘best estimate’ corresponding expenses.
Like me, you’ll be instantly able to see the monthly outcome (the profit or loss). You might want to ‘tweak’ the sales and expenses in your action plan until they look reasonable and realistic. I did – continually!
Enter sales and expenses month by month until the whole year is complete. Then you’ll have an action plan to grow and develop your business for the next 12 months.
Let’s get started on the Business Action Plan spreadsheet:
“A journey of a thousand miles begins with a single step” Lao Tzu, Chinese Philosopher
PART 1. SALES
(ALSO KNOWN AS ‘REVENUE’ OR ‘TURNOVER’)
With your annual profit goal in mind, begin to complete the first month of the financial year:
Sales: Enter your ‘best estimate’ in $ sales.
How many sales will you need to make in the first month?
The cost of Sales: Enter the $ figure that will be the direct cost of making the above sales (supply costs)?
Gross Profit: The total of your monthly sales less the direct costs.
PART 2. EXPENSES
This is where you list your ‘best estimate’ of all the expected costs for the month.
Use current expenses as a guide.
Add as many new lines as you need.
Use the ‘insert comment’ feature on any cell to record what is/isn’t included.
PART 3. PROFIT BEFORE TAX
To get to your Net Profit:
1. Subtract your Total Expenses in part 2 from your Gross Profit in part 1
2. Net Profit is what’s left
3. Track your net profit as a % of your total sales. Benchmark against your industry average.
Complete your business action plan for each of the next 11 months. Make adjustments for any particular abnormalities. For example:
- Maternity / Paternity leave
Going through this exercise will super-focus your mind on what you want your business to achieve this year. You’ll get a sense of:
- What is possible and what is not.
- What actions need to be taken each monthy month.
- Where you’ll need to spend your time.
Your Business Action Plan will:
- Be your business action plan ‘blueprint’ for the year.
- Show you where your focus needs to be each month.
- Be your plan to move your business forward.
- Act as your guide to a successful year.
- Show you the path to achieve your business goals.
After completing the 12 months you should have a Business Action Plan that looks similar to this (click to enlarge):
You can download a Business Action Plan pdf here
You will find that going through this planning exercise really focuses the mind. It will help you crystallize your business goals for this year.
“What you do today can improve all your tomorrows” Ralph Marston, Author
STEP #2 IMPLEMENT YOUR BUSINESS ACTION PLAN
Implement your plan and make it work for you. It’s for you to get from where you are now to where you want to be.
STEP #3 REVIEW YOUR BUSINESS ACTION PLAN
For any plan to succeed it needs to be reviewed. Reviewing your action plan against your results is what makes your plan really powerful. This is where you have the opportunity to review, refocus and redirect.
YOUR BUSINESS ACTION PLAN TO-DO LIST:
- List your opportunities from the SWOT analysis (to provide context for your estimates).
- Write down your financial goals for the business for the next 12 months.
- Find someone to work through the business development plan with you.
- Schedule a time to create the plan – undisturbed!
- Download the Excel Business Development Plan spreadsheet and get started following the process above!
Good luck writing your plan. I want to hear from you so write to me in the comments section below. Let me know your challenges and successes after completing your business action plan, and I’ll get back to you promptly.
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