Have you revisited your business plan lately? You should.
In part three of this five week retail makeover, fashion finance expert Melissa Brown tells you how pricing decisions can impact your bottom line.
Whether you’re a designer, a stylist, a retailer or you simply love clothes you’ll know that undergarments are just as important as outer garments.
They simply make some clothes look so much better. Who notices a fabulous dress if all you can focus on is bumps, ridges and underwear lines?
Never a good look.
So what does Spanx have to do with money and your business? In the same way that foundation undergarments make clothes fall and look better, foundation work in your business will also help your business look and perform at its best.
By foundation work I mean foundation documents like your business plan and budget. These documents may seem like seriously unsexy (and unnecessary) documents but without them you have no basis for what you’re doing in your business.
Spending time doing the foundation work allows you to create a base on which to build your business. To work out key things such as where you want to go, what you want to be, what your purpose is, who your customer is, how much money you will need, when you will need it and how much money you can make from this business.
All important things to know so that you can be focused and purposeful in your decisions but also so that you can spend less time putting out fires and reacting later on. Sounds great in theory but what should go in it?
My suggestions are:
- Core Values
- Core Competencies
- SWOT (strengths, weaknesses, opportunities, threats)
- What You Will Do: Where you’ll be located, who you’re targeting, where you’ll be positioned, what you’ll sell
- How You Will Do it: Marketing, process (make vs buy), how you’ll fulfil your orders, your capacity
- One year goal, three year goals and your BHAG (10 year goals)
- Financials: Monthly budget for two years as well as a story explaining what you’re basing your numbers on. Maybe you created a business plan or budget when you first started out and have never referred to it since. That’s about as useful as keeping a pair of Spanx in an underwear drawer and never wearing them. So whether you need to blow the dust off an old plan and revise it or create a new one, here’s a few things to keep in mind:
- A business plan doesn’t need to be a 50 page document. Sometimes the most successful plans are also the most succinct. If even the idea of a dozen pages makes you break into a sweat there are some talented people who have created one page plans that allow you to plot your business onto a single page. I use an adapted version of Verne Harnish’s one page plan with great success in my own business because you can pin it on a wall and it’s a visual, daily reminder of what we’re doing and where we’re going
- Your budget and business plan doesn’t have to be perfect and you don’t have to be an accountant to create one. Think of them as a starting point. Sure some of the figures won’t be right but you can tweak them as you get more clarity on what your real costs and income are.
- You should look at your business plan and budget less than once a day but more than once a year. My suggestion is you should at least be looking weekly at your budget and quarterly at your business plan. Any less and too much has happened and you’ll simply be reacting instead of anticipating.
Like great supportive underwear, you need to ensure your business is supported from the very beginning. A business plan and budget may not be sexy or exciting but they’re an essential part of ensuring your business looks amazing and is shown off to its full potential.