JOHANNESBURG - Given the low-growth economic environment, competition for market share among small and medium enterprises (SMEs) continues to intensify.
It is therefore vital for business owners to use their planning for the year ahead as an opportunity to reflect on the performance of their business, as well as on the wider context in which it operates – where it fits into the market and how to not only attain, but also gain market share.
To help you structure your year-planning exercise, here is a checklist that every SME owner should consider when planning for the year ahead:
Look at the wider picture: Consider what is happening both globally and locally regarding micro and macro-economic factors, such as demand for goods and services, exchange rates, interest rates, fuel costs, inflation, electricity supply and water supply.
Check available resources and infrastructure: Review equipment, staff, storage, administrative capacity, transport and logistics, as well as IT and communication.
Look at efficiencies: Consider how you can do things better, faster and cheaper; without compromising quality.
Review insurance policies: Can you bring your premiums down? Shop around for better options and update the value of your insured assets to make sure that you are not over- or under-insured.
Investigate alternative suppliers: There is a case to be made for staying loyal to your stalwart suppliers, but there is no excuse for sticking to the same suppliers just out of habit. Scout the market and renegotiate your supplier terms.
Scrutinise financials: Look back in order to see where you could have done better, and what you can learn from the past year’s financial performance.
Monitor liquidity: Any growth that is not underpinned by a plan to ensure adequate cash flow can be dangerous and can bring the whole business down even as it expands.
Scan competitors: Business owners often say that they don’t bother with the competition - they just focus on doing the best they can. While this is a good principle to follow when you are in the swing of things, when you are in planning mode, it is imperative to spend some time on scouting out your competitors.
Consider targeting new markets and creating new products: If you don’t update and innovate, your business runs the risk of falling behind and becoming irrelevant. Consider how you can use new technology to improve your products and services.
Preserve your current customer base: For as long as economic growth remains sluggish, not only are new customers hard to find, but you can be sure that other businesses will be coming after your existing customers. Reach out to your regular customers, listen to them, and focus on constantly improving your service.
Don’t neglect marketing: As business owners tend to focus on operations, they can often neglect to develop their marketing approach over time. Marketing channels and methods are changing rapidly, and you cannot afford to rely only on old methods just because they worked in the past. Are you on top of social media? Are there other platforms that you can use, or get better at using?
Once you have your 2019 plan, sit down with your team and start working on getting their buy-in. Do it with an open mind and include any relevant suggestions. A plan cannot be fully implemented without the collaboration of the whole team.