Research shows that there are a lot of reasons why Emerging Small and Medium Enterprises (ESME) fail. Though this may largely be due to a lack of planning and management skills, no differentiation, and the absence of a vision. One solution to this problem is to make sure that a business plan is regularly assessed and updated with the most recent trends and developments in the market so that the business stays the course in an ever-evolving business environment.
Entrepreneurs sometimes feel that there is no need to consult their business plan because they understand their industry. This is a risky practice since a business plan is a map that indicates the business’ ultimate destination; its business goals, and how the goals will be achieved. As a result, it needs to be revisited at least quarterly. The four aspects are critical to look at during the process:
Ask yourself serious questions
The survival of your business will depend on the kind of questions you ask yourself once you assess your business plan – be realistic. Questions such as who, what, why and how, should take precedence, for example:
- Why does my business exist and is it still relevant?
- What message is my business sending into the market?
- Am I priced correctly?
- How is my marketing
- How do my actual sales compare to my forecasts?
- How is my business performing in comparison to my competitors?
- What do my customers need? why? have I engaged them?
- What problem is my business solving and how?
Questions have a way of bringing reality into perspective. Thus, it is crucial that you ask yourself the right questions while relooking at your business plan.
Starting a new venture, product or service
If you perhaps find that you looked at the original overview of your business plan and noticed that, you have expanded without including the expansion of a new product or service into your business plan, it is advisable that you include it immediately.
Consider the economy and study your target market
With the current irregular economic environment, the business needs to adapt in order to survive. Invest time, money and effort into studying your target market to see if there is a shift in their needs. Look at the demographics and psychographics of your surrounding environment.
Demographics is the study of statistics such as births or income that illustrate the changing structure of human populations. Psychographics is the study and classification of people according to their attitudes, aspirations, and other psychological criteria, especially in market research.
During the research, if you notice that the market’s demand is more than the supply, then you are still in business. Talk to your target market and listen to what they have to say as they will give you valuable information on how they are adjusting in a tough economic cycle.
Take actions and set goals
A business plan alone is inadequate to ensure success. Make the time to draw up your short-term, medium-term and long-term goals. Set deadlines to accomplish them and make sure that you reassess your goals on a regular basis.
To assist entrepreneurs in their journey, Bank Windhoek believes that the days of reviewing your business plan annually are over. The ability to change and adaptation is the prerequisite for business success and our mentorship programme will help entrepreneurs to review their business plans effectively so that the business remains relevant and embraces change. This is the Bank’s way of investing in the communities in which we operate.
Mbo Luvindao is Bank Windhoek’s ESME Finance Branch Manager