Here are the steps you would need to take. First, you would need to know all your current business numbers. This will be the basis for the plan. You're going to need to know: 1. What your current average monthly sales are 2. What your current average monthly material cost is 3. What your current average monthly labor cost is 4. What your current average monthly fixed expenses are 5. What your current average monthly variable expenses are 6. What your average number of transactions per customer per month are 7. What your average dollar sale per transaction is 8. What your average monthly profit is 9. What your average monthly profit margin is 10. And what % capacity your business is at right now Second, decide what you want your salary to be Third, determine how many years in the future you want to plan for Fourth, you will need to know: 1. What % is your material cost of sales? 2. What % is your labor cost of sales? 3. And what % is your variable expense of sales?
So, why is business planning so crucial? In a word, it provides "clarity". Investing time to develop a plan provides precise clarification of the company vision to both employees and customers. In addition, it provides a mechanism to gauge the results of the business and provides the foundation for future growth plans. In the long haul, it enhances the company valuation through fiscal responsibility, which provides the story of opportunity to any future investor or employee. In short, the benefits of planning allow the company to articulate a common vision to align resources and make an efficient use of investment dollars. A company that is perceived to be a "well_oiled machine" is attractive on many fronts _ both externally with investors and internally with employees through job satisfaction and increased tenure.