Managing a Small Business: Management | Western Cape Government

Managing a Small Business: Management

Business Planning


It is very important to plan for the future of your business.

If you do not look ahead, there may be events that come your way which you do not know how to deal with. When this happens, you end up reacting to a situation rather than having a calm approach when dealing with a problem. Most business problems can be solved if you can minimise the surprises that come along the way.

Reacting to a problem instead of having a general plan beforehand can lead to bad business decisions that could harm the business in the long term. In any business situation you would like to be in a position to take advantage of opportunities, and not be one step behind fixing up old problems that could have been avoided through careful business planning.


How often should business planning be done?

Generally, business planning is an ongoing process. This process should be done before the start of every month cycle.

How does one do a business plan?

Commit on paper what your the sales objectives are and any other goals you need to achieve to improve the business.

Once this is listed and the month is complete, you can compare whether you have achieved these sales and the other goals at the end of each month.

How do I stay on top of my field, even if I am a small business?

No matter how small you are, it is a good idea to do an annual review of activity in your field and look at how successful your business is from a year to year, what worked and what needs to change.

You can do this review with other members of staff or an advisor who specialises in your field of business. Getting insight from throughout the business is useful and helps brainstorm future ideas for your business that may not have come up in day-to-day activities. An annual review is hard work but in most cases creates opportunities. This is especially true if you wish to grow your business or launch internationally.



Example: What are your future staffing needs?

It is extremely important to plan your staffing needs - what happens if your core staff become ill or leave, will your business be able operate for the time when there is no one fulfilling key roles? Also, how long will it take to find the right skills for that job - this is especially the case if you have highly specialised staff.

You also need to know when you can afford to hire more staff and what you can afford to pay them.

Cash flow

Cash flow is the funds you have available in the business to cover running costs while proceeding with work, especially if you only get paid once the work is completed rather than in monthly instalments. In some organisations, especially small businesses, it is important to negotiate with your clients that they split payments (for example you get paid 10% up front, 30% when you complete the first phase of the project and the remainder when the entire project is completed). This enables you to have some cash flow for the running costs of the work you need to deliver.


You need to know when there are slow times in your business. For some businesses, this could be during the winter months, for others winter could be the busiest season. To make sure you last - and thrive - from year to year, you will need to know your sales pattern over the year, so that you can make allowance for any times when there is not the same amount of money coming in from sales (sales fluctuation). If this is not worked out well, the business will not be able to pay its bills and will be threatened. If you plan properly for sales fluctuations, you will have money to tide you over in the slow months.

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The content on this page was last updated on 5 September 2013