It’s that time of the year when many companies are in their planning mode preparing for the next fiscal year. This involves zeroing in on the markets to address, the offerings to take to market and from there arriving at a target to pursue. Once this target is finalized for the different business segments, it is broken down into segmental plans, which leads to marketing plans.
This is an involved and significant exercise in larger companies occupying strategy and marketing teams for a few weeks. Obviously, the targets are huge and a considered approach is needed before fixing them.
Most businesses assume that such exercises need to be carried out only by larger companies. By staying away from a detailed planning exercise, small and medium-sized businesses end up making a huge mistake. Here’s why.
1. Business planning and developing a market strategy gives clarity. It is easy to get carried away by the size of markets portrayed in research reports. A planning exercise forces you to take a more grounded approach and consider the markets from different perspectives. Which segments of the market make the most sense for you and how can you go after them? Understanding your addressable market is important to decide on your execution strategy.
2. Planning helps you narrow down your options. For instance, your offering may be relevant for multiple industries. As an SME, do you have the bandwidth to go after all of them or is it more prudent to tackle 3 or 4 industries at a time? Sometimes businesses in their enthusiasm for growth bite off more than they can chew leading to disastrous results. Strategy planning compels you to raise important questions and find answers for them too!
3. Investing time and effort in a plan for the year also help you understand your target audience. You need to figure out who the high-potential prospects, the must-haves and what should be the size of deals you need to chase. By pinning down the profile and characteristics of the potential buyer, you are starting at a more advantageous position. In addition, it gives you pointers on what messages you need to share with your buyers.
4. Adopt a bottoms-up approach and arrive at an overall target for your business. This will also tell you what kind of resources you need internally to support this growth. Do you need to hire more developers or more mid-level managers and so on? Will you run out of space midway through the year? What kind of budgets do you need to set aside for training? In this way, you are identifying the expenses that will come up during the year and give you an indication of profit levels, cash required and so on.
5. Now is a good time to understand what your competition is up to, their plans, successes, market presence and so on. Your competitor’s moves would surely influence yours too and so take the time to get to know them.
A strategy exercise in this way brings clarity of through and that helps immensely during execution. Don’t hesitate to invest effort and time in this.
By embarking on this exercise before the financial year and action begin, you have a better chance of success.