Ask any business owner what’s hardest: starting a company or keeping it in business?
Currently, only 48.5% of businesses are still open five years after starting up (source). Taking a company from startup to small business is a real challenge. And it takes more than just a strong marketing strategy, a steady cash flow or a high amount of funding. Efficient management and resource planning are just as important for small businesses survival.
Most companies start off on a small budget. That’s why, often, small business owners’ best strategy is to make the most of what they got. Resource management becomes very important and it all starts with strong resource planning.
What is resource planning?
Resource planning is a key part of any business or project management plan. In this phase, small business owners identify all the resources needed to deliver a project within a specific timeframe. In this respect, anything counts as a resource: staff members, roles and responsibilities for each member, equipment for doing the work.
Resource planning also includes a schedule with detailed information about what needs to be completed and when. A resource plan features:
the amount of resource needed: how many developers or designers, for example, are needed
schedule dates for using planned resources: when and for how long do small business owners need people assigned to tasks
Why is resource planning important
1. Resource planning helps small businesses manage resources efficiently
When starting a company, hiring a specialist for each specific task might be costly. That’s why so many small business owners juggle a lot of different activities themselves. They often do accounting, customer support, sales and manage inventories, for instance.
Things don’t necessarily get easier when they establish a team of 3-4 people. Small business owners need to make sure that their hires have enough tasks to work on so they don’t get bored. At the same time, overloading staff members isn’t a long term strategy either.
This is where resource planning is most useful.
Resource planning helps business owners make the most of their available resources, no matter how scarce these are. Whether it’s one employee or five, a resource plan makes sure that everyone is using their time and availability efficiently.
This is even more important as small businesses scale up. As teams grow, business owners have to make sure that everyone has their share of work cut out for them. Also, it’s essential to assign the right people to the right kind of tasks. Efficient resource planning allows business owners to match the right skills to the right tasks.
At the same time, a resource plan makes sure no one gets overworked.
2. Resource planning helps small businesses anticipate when they need to scale
A key aspect in resource planning is identifying the amount of resources needed to complete a project. This can be very helpful when the workload increases. As companies grow, so does the volume of work. Also, a lot of companies see an increase in activity during specific seasons – for example the holiday shopping season.
Doing extra house might not be a problem if it’s a few days or a week. However, in the long run, it becomes both frustrating and tiring. With resource planning, small business owners avoid the uncomfortable situation of constantly overworking – either themselves or their staff members.
Resource planning helps small business owners anticipate when they need the extra hands. It also shows them how much they need to scale their team.
3. Resource planning helps small businesses understand their needs
Resource planning is also about identifying what resources you need to complete a project.
At some point, small business owners will need to bring on more people. This can be for help with specific tasks (e.g. development) or to handle the increasing workload. However, without a strong idea of what needs to be done, it is hard to know what role or position they need to look for.
Resource planning can show small business owners what tasks are left unassigned and where they need help. Maybe a designer needs a backend developer for a month to implement a new landing page, for example. Or the team is mostly backend engineers who need some help with front-end tasks.
Additionally, a resource plan will show the exact workload that a new position needs to fill. This may help small business owners figure if they need a permanent hire, contract or freelancer.
4. Resource planning helps small businesses keep things under control
A resource plan includes dates for when and for how long a resource is needed. This helps outline important deadlines for delivering work. It also matches tasks to resources, showing who needs should be working on what when.
By keeping track of deadlines and covering the entire workload, business owners can stay in control of things. There are fewer chances of missing or forgetting about important milestones. Resource planning can also pinpoint when there’s a chance of going over budget and of exceeding set deadlines.
What’s more, a visual resource plan will give small business owners a birdseye view of important milestones and deliveries. It also shows when tasks overlap, when they conflict and when small business owners need to step in.
5. Resource planning helps small businesses keep staff or team members connected
A strong, connected team can accomplish a lot more than mere work colleagues. Building a team spirit, connecting people is also important for small business success. To this end, communication, transparency and trust are key.
Creating and sharing a resource plan for small business can help pave the way through. This way, everyone knows what their team member is working on, when they need to collaborate and when important deadlines are set. It can help create an atmosphere of transparency that allows team members to feel welcome.
At the same time, sharing the resource plan with all staff or team members can improve communication. What’s more, if there are irregularities or mistakes, things can be discussed in order to avoid bigger problems down the road.
Resource planning tools for small business
Resource planning is much easier when you have the right tools. If you’re just getting started with resource planning, spreadsheets might be a good solution. However, in order to keep track of everything, if you’re meeting your time and budget requirements, dedicated resource planning software makes all the difference..
Toggl Plan, for instance, is a very good, easy to use resource planning tool. All you need to do is create a list of tasks that need to be completed and add your staff or team members. Next, assign tasks to your team via drag and drop, set their start and due date. To make everything clear, you can add details about tasks. Toggl Plan also features Gantt charts, which make it easier to keep an eye if things run on schedule.
If you’re looking for more options, check out our article about top resource planning and management tools.