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Category: Marketing Current Grade: A Total Views: 562 Member Comments: 1 |
Posted on: 01/08/2010 Posted by: cperkcpa Blog Points: 418 View all blogs >> |
You must plan on success otherwise you are planning to fail
Planning is an important part of any businesses success. Businesses need an overall strategic plan to guide the overall direction of the company. A business needs to be able to forecast cash flows. Businesses need to market to new and existing clients.
The Strategic Plan
Understanding a company’s strengths, weaknesses, opportunities and threats (SWOT) can help especially smaller company’s find advantages and quickly change directions if they need to. All four eliminates of the SWOT analysis are needed in order to make good decisions
A company’s strengths and weaknesses are internal resources. A company should look at their human capital as well as business capital to determine where they are strong and where they are weak. This initial assessment tells management what they have to work with and can help guide them in finding resources to help where they might be the weakest.
A company must look outside itself as well this where they can identify any opportunities and threats threat might be emerging. By identifying opportunities early a company can take advantage of client needs that others might not be filling. Companies may also find that heavier competition in some areas of their business.
There are many ways to compete when you find new companies entering your market. Generally speaking the least desirable is to compete on price. Only large companies can do this for long. When competing on price margins get eroded to a point that only volume can possibly leave some room for profit.
A much more desirable way to compete is by differentiating your product or service. This strategy looks at other characteristics where their product or service is different than the competition. This could be faster service, better quality product or service, better customer service, a more individualized product or service. When a company reviews their strengths and weaknesses they can find better ways to differentiate their products and services.
The Budget
As important as the strategic plan is a well thought out budget. A budget can be used for planning and control. Budgets assists in planning by helping management think through how to best use their limited resources to achieve their strategic goals. A company may come to realize that need to spend more on marketing. It may be necessary to plan on the purchase of a new server and related hardware. It may be necessary to build a new website. A budget allows for money to be set aside for these business needs.
A budget is also a tool to control spending. By regularly comparing actual results with budgeted results a company can verify that key results are within budget. Any areas that are deemed significantly above or below budget should be looked into and remedies found where possible. If revenue is falling significantly short of budget it is best to catch it early and making a necessary changes to either bring it in line or cut back expenses.
The Marketing Plan
The strategic plan and the budget will place limits on the marketing that can be done. It is important to incorporate marketing needs into the budget. Overtime a company will have some idea of how much and what types of marketing are required to generate the levels of revenue that have been budgeted for.
Planning is an important part of the success of any business. If a company fails to plan they are planning to fail. When times get tough it becomes even more necessary to plan your success. There are many examples of successful companies even in hard times.
Charles Perkins, CPA
(206) 422-5504
Good advice