by Deborah Sweeney, CEO of MyCorporation.com
Writing a 5-year plan is usually the very first step in the occasionally stressful but always rewarding road of business ownership. One of the biggest problems with most 5-year plans is that you are sort of flying by the seat of your pants when you write it out. Until you actually run a business, you have no idea what type of obstacles you’ll face, or even what you can achieve. A 5-year plan is often based on cursory research, some hope, and a bit of guesswork. At the end of your first five years, you should look back on your original plan to see how far you’ve come, then figure out what you need to work on for the next 5 years to come by doing the following five things:
1. Identify new goals.
After the first five years, the rate of failure for small businesses decreases dramatically. If you’ve made it past the five year mark, your business has shown that it can be profitable, which was likely one of your main goals. But what were your other ones? Did you set out to increase your market by a certain percent? Did you want to pay back a good chunk of your business loan? Check off whatever goals you met, and focus on the goals you didn’t meet, or want to build on. Doing this may seem a bit obvious, but actually looking at a hard copy of your goals is an excellent way to help focus your company and define your growth strategy.
2. Reevaluate what’s working and what isn’t.
When you run a successful business you can sometimes get stuck in a ‘if it isn’t broken, don’t fix it’ mindset. It can be a bit unnerving to fiddle around with the inner workings of the company if, thus far, all of the elements seem to be aligning and working well enough together. But if you refuse to fix or ignore a problem in the business, that problem will rear its head and could be a lot more destructive. If you feel like something isn’t working, be it marketing, accounting, employee relations, or stocking methods, now would be a good time to fix that problem.
3. Take a look at your competition.
Your market and industry has probably changed quite a bit over the past five years. Competing businesses have fallen, and new ones have popped up to take their place. Take a look at the industry and your competitors to see what everyone is up to. Doing so will help you to continue to stand out from the crowd, and could also reveal new ways to remain competitive within the industry.
4. Make sure your finances and paperwork are in order.
After five years, you’ll probably have an excellent accounting system in place, but it never hurts to perform a sort of self-audit and see exactly where you stand financially. The five-year mark is also a good time to make sure any state paperwork that needs to be renewed has been – some states, for example, require businesses to renew their trade name (DBA) every five years. If you’re still chugging along with the default sole-proprietorship structure, think about forming a separate entity for your business so you can protect your personal assets and allow your business to carry its own debt.
Stagnation is your business’s enemy, so never stop fighting it and always try to grow in some way. Growth goals can be as simple as making more money or finding more customers, but they can also be a bit more abstract, like introducing a new marketing strategy or learning more about entrepreneurship. As long as you are always aiming for bigger and better, neither you nor your company will stagnate.
Making it past the five year mark is a real accomplishment, but it is too easy to start resting on your laurels and assuming your success will continue without any further effort. You are always going to face challenges as a business owner, though those challenges may change from the ones you dealt with when you first started. Use that old five year plan to figure out what you’ve done well and what needs work, and then try to improve on both. And don’t forget to enjoy your success – you’ve earned it!
About the Author:
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @deborahsweeney and @mycorporation.