UK is a great place to start a business (even though the survival rates are low). More than 50% businesses don’t survive beyond five years. According to the statistics published in 2016 by the Small Business Administration (SBA), 80% SMEs survive for more than a year; whereas another 50% survive at least five years and only 33% survive ten years or more.
Why so many SMEs fail?
Here are the top reasons responsible for the failure of SME’s-
1. Lack of vision when starting new business
2. Poor Management of Finances and employee management
3. They simply run out of cash.
4. Wrong choice of location for business operations
5. No proper marketing/business planning
6. Expanding business in non-core areas
As mentioned in point number 5, most of the businesses do not have a business plan or financial goal. One must remember that a business plan is a road map to his/her business’s future. Without a plan, a business is essentially rudderless and day-to-day activities are likely to be hampered. The key to success of a business is efficient planning.
Most of the entrepreneurs are not realistic and don’t have sufficient knowledge about the efficient execution of plans. This eventually results in failure of their business.
Points to be considered when setting your business goal for 2017
1. Write down all the goals – Quarterly, Six Months, Yearly.
2. Determine your objectives- Where do you stand and what you want to achieve.
3. Why is it important for you to achieve the goal?
4. At what rate your industry will be growing.
5. What are the headwinds and tailwinds for your business- Factors that will have the positive and negative impact on your business which are out of your control?
Once you have considered above factors, you can start preparing your financial goal for the year by following below mentioned steps:
1. Sales Forecast- Make month to month forecast. To achieve your goal, you need to consider various factors like number of leads generated in the previous year, sales generation report monthly, quarterly, and annually.
2. Direct Costs and Overheads- Direct Costs include raw material, purchasing, labour costs, etc while overheads include rent, electricity, sales and marketing, telephone costs. Direct Costs can be the percentage of sales, while overheads will remain static over a period.
3. Based on the above figures you can arrive at profit/loss projection report.
Monitor your business plan now!
Most of the successful businesses, review their business plan with actual performance on monthly basis. To ensure the success of your business you need to review all the parameters and identify the gaps for better output.
We have attached
a business plan template here for your help. You are just a click way to setting efficient goals for your business.
Remember, a beautiful saying by ZigZiglar ‘A goal properly set is halfway reached.’ So be considerate when planning your business goals.
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