What is Your Business Plan?
Most business owners don’t enjoy spending the time and energy to create a business plan. The reasons are many be it a lack of time, a lack of discipline to follow it once it’s been put together or a lack of confidence about whether or not it really helps the business. I’m a great believer in a business plan, dovetailed with a sales and marketing plan and complemented with an educational plan.
What’s an educational plan? My income comes from working in the service sector. One of the best things I enjoy about my business is that there is always a lot to learn or in fact I see it as a life time of learning. I therefore spend time regularly attending conferences to stay on top of what’s happening in my industry and during 2012 and 2013 I went back to college and did accounting and tax classes to earn a Certificate of Taxation as these were two topics I wanted to learn more about.
So what do you see happening in 2014? From the research I’ve done, here’s what’s happening and where it makes sense to spend some of my time during 2014.
The economy in 2014
The latest from the Federal Beige book says the US economy will continue with modest to moderate growth. This means the focus moves from cutting costs to maintain the ‘bottom line’ to putting strategies in place to grow revenue. This generally means hiring more staff and/or investing in training and adopting new technologies so your business isn’t falling behind and at least matching your competitors.
Not ready to take on new staff or take on the time and expense to re-train your employees or simply don’t have employees? Outsourcing is a typical strategy of the large corporations so why not copy the big boys? Better yet, spend time building relationships and finding resources you can hire on a part-time basis who have the right and current skills to meet your needs. The world of virtual assistants who are trained and hungry to provide a service is ever growing. Finding very good and the right virtual assistants takes time and effort. Start giving that some thought and finding the right source so it’s ready to go when you need it.
Upgrade your tools
A successful business needs a range of fixtures, furniture and equipment or what I call tools. This can be computers or related technology products such as software or items specific to your industry. For example, if you are a dentist it can be x-ray equipment, tools you use in the operatory such as dental chairs, autoclaves, surgical lights and more. The IRS still allows the Section 179 deduction of up to $25,000 in equipment but it’s likely it will go back up to $250,000 or $500,000 so check with your CPA and do the upgrade to keep your business competitive and relevant or your customers have a reason to look elsewhere.
Low finance rates
The economy is getting stronger. A stronger economy means banks have to put their capital to work by lending. If you look at interest rates for SBA loans to buy real estate they are about 5%. If you look at SBA loans to buy a business and take out a competitor they are about 6%. If you look at loans to make capital equipment purchases they are low and attractive. Upgrade your store or office where your customers come so they can tell their friends that your business is the best and that you plan to be around for the long term. Make these investments now so you can maximize your return and in the process, give you and your employees a lift.
If you own a business you should put money aside in your estate and it should therefore be part of a well-developed estate plan. The economic and business future looks good. The 2014 estate tax exemption is $5,340,000. It’s best to begin estate planning early so you can make the right decision and have time to implement your plan. Making an estate plan early means now – not when you get around to it.
An Estate Plan is good, a Succession Plan for the business is better. What’s a Succession Plan? A business has only one owner or one CEO. That’s because a business can only go in one direction at a time and it’s the role of the owner or the CEO to provide that vision and direction.
Succession planning provides a smooth transition for the next generation. The process includes the valuation of the business and creating the necessary legal documents such as a buy/sell agreement. It also involves key employees or the owner’s family to understand their interests and willingness or unwillingness to be involved in the future direction of the business if the owner or CEO wants to retire or tragically, they become ill and die. If Succession planning is not done properly it can mean the loss of an entire lifetime of work. Add this to the do list. Better yet, pick up the phone now and start putting an action plan together.
The economy is moving in 2014. Are you ready for the ride and have the energy, enthusiasm and focus to get your share of the action? If not, it’s time to sell or the value of your business will simply drift and decline. If you would like more information please visit my website Business Advice Books.