Required Tools Every Business Owner Must Have

–by Rick Lugash–

Every business, regardless of size should have the following plans clearly established and operating in their business.  Part of being a small business owner is the ability to step out of working IN your business and spend some time working ON your business as a manager.  These are the management tools that you want to be using:

A GAP Analysis which specifically looks at where you currently are in relation to where you want to be in major areas like revenue, profit, new customers, profit margin, etc.  This is a little broader than just writing down your goals. It actually identifies the gap that currently exists in where you are and where you want to be.  Common mistake: business owners don’t establish very specific, measureable targets for their business.

A SWOT Analysis is an excellent way to identify your personal strengths and weakness or those of your organization (even if you’re a one-man show).  Knowing these can help you to get the support you need to manage the weaknesses so you can focus on the strengths.  And clearly knowing the opportunities and threats that exist in your external environment or marketplace gives you the ability to navigate around real and perceived threats that can exert pressure on your business so that you can focus on seeking out the opportunities to move your business forward.  Common mistake: business owners don’t think through the implications or the opportunities associated with their SWOT.

Every business needs Revenue Plan that identifies and lists all of the products and services that your business offers to the marketplace and their unit price.  The total of your revenue plan should be at least the difference in your GAP analysis between where you are and where you want to be.  Any shortfall will need to be supported by more customers or a higher volume of sales from existing customers.  Common mistake:  business owners think that have only one product or service.

A Marketing Plan is critical.  It consists of a detailed plan on your different lead generation and marketing initiatives as well as their schedule and a budget.  A good marketing plan has each marketing initiative scheduled out on a calendar with a task list and an accountability tracker.  Common mistake:  business owners never develop a marketing detailed enough that they can use effectively as a tool.

An Operating Budget.  An operating budget takes the results of your revenue plan and identifies all of the businesses expenses and cash needed to generate and support that revenue.

Done effectively, these plans are all related to each other, meaning that a well developed, practical revenue plan depends on the GAP of where you are to where you want to be.  And, you can’t have a realistic operating budget without a marketing plan.

This can all be quite simple to put together.  An hour a week at the end of a year is 52 hours spent working ON your business.  I’d say that’s a pretty good use of time.Wha