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PLANNING AHEAD

The plan that made sense for your small business a year ago isn’t necessarily right for you today. Market conditions are always changing, so it is a good idea to revisit and update your business plan on a regular basis.

As your business grows, your strategy needs to evolve to suit the new reality. For example, your focus is likely to change from winning new business to building profitable relationships and maximizing growth with existing customers. Existing business relationships often have greater potential for profit and also provide reliable cash flow. New relationships may increase sales, but the profit margins are often lower, which may not be sustainable.

At the same time, every business needs to be ready for new opportunities. There are inherent risks to relying solely on existing customers. Diversifying your customer base spreads those risks out so that losing a single client does not do significant damage.

Maintaining the same business model, but on a larger scale is not the only route to growth. There are other options such as outsourcing, acquisitions or franchising that might provide better growth opportunities.

It’s important not to assume that your current success means that you will automatically be able to take advantage of new opportunities. Every important move requires planning in the same way as a new business launch.

Watch out for being too opportunistic and ask yourself whether new ideas suit your strengths and your overall vision of where the business is going. Bear in mind that every new development brings with it additional risks. It is worth regularly reviewing the risks you face and developing contingency plans.

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