FOR many business owners, the process of writing a business plan can seem overwhelming, so much so it’s often one of the vital elements of commercial success that’s ignored altogether.
However, much of the angst around business plans can be easily resolved.
Whether you’re looking to secure finance or investment, or simply get more clarity around where your business is heading, there’s no substitute for a well-conceived business plan.
With so much material available on the topic, from internet guides to using templates, as well as books on creating the perfect plan and expensive consultants touting their services, it’s not surprising business owners experience information overload.
A good place to start is to address some misconceptions in the minds of business owners.
The process of business planning should start with a process and end with a document. Many people get this the wrong way around by starting with a document, and ending with a compromised result.
If you’re keen on getting more structure and clarity of direction in your operations, take 30 minutes with a coffee somewhere quiet – before you even embark on writing your plan – to jot down notes around the following.
• Commit to the process of creating a plan. Many SME owners put their business plan off because they are waiting for more certainty about current partnerships, sales or events. Your plan should guide your activity, not the other way around. Without a plan your business is like a ship without a rudder, you’ll be unable to gauge success and determine what you should do first, second or not at all. This is one task you can’t do half-heartedly. Success is about focus.
• Get clear about your business vision (your plan will then take this vision and translate it into a strategy). Your vision should outline where you want to see your business going in the medium to long term and can be expressed as a series of objectives.
• Consider who your primary customers are, what’s important to them and where they are both geographically and in life. Get into their headspace for a while and it will help you determine what’s possible for your business’s future. After all, your business should exist to solve a consumer’s problem.
• Consider the different types of business models that could work for your business. Just because you’re a franchise now doesn’t mean that’s the best model moving forward – think creatively and without restriction. The creation of your plan will help you determine the best option for you.
• Consider what kind of financial outcomes you’d like in your business. Be specific and realistic. Have a timeframe in mind. Without knowing your ultimate financial goals you’ll lack a key driver for your plan.
A good business plan should align your strategy, business model, proposed actions and financial implications, as well as consider the questions and problems that are top of mind with your target audience.
Ultimately, a business plan should be bespoke for your operations, rather than try to fit your business into a predetermined template.
There are a number of ‘one-size-fits-all’ templates available to assist in preparing a business plan, but they don’t constitute a replacement for a complete planning ‘process’.
Consultants have typically filled this role, conducting meetings with clients, asking them questions and then going away to formulate a plan. However, the high costs involved in engaging a consultant can be prohibitive for many start-ups or smaller, growing businesses.
Honesty is critical when planning. Where possible consider using evidence such as market research reports, historical sales, or competitor data to anchor your plan in fact. This breeds confidence in your plan, and the logic on which the plan is constructed. Particularly when presenting to investors or third parties, the use of independent, factual information adds to your credibility, and demonstrates your knowledge of the market.
One useful approach to business planning for established businesses is to peg the frequency of the process to your budgeting or strategic planning sessions. This ensures that your budgets are created in a way that is consistent with your strategy, and are integrated with the initiatives for the upcoming year. Many strategic planning sessions descend into brainstorming sessions. The discipline of turning these ideas and issues into a plan ensures that the appropriate actions are identified and budgeted for.
Marcus Tarrant is the creator of the Business Planning HQ Toolkit, which comprises a series of consultant-style questions that have been packaged into an Excel-based business planning toolkit. Contact Marcus on 0404 029 835 | www.businessplanninghq.com.