What A Business Plan Can Do For You
If you own a small business, then if you haven’t already prepared a business plan, you will have heard of them.
If you have not prepared your business plan, it’s probably because you can’t see what it can do for you.
You may think your business is too small, or that you can manage everything within the time you have, or that you can’t look too far ahead because it’s unpredictable.
You may think that it’s too much bother – you know what you want to do and you’ll just take small steps until you can afford the time or money to aim bigger.
In response to that, let me ask you this: whether you have only just started the business, or if you have been in business for a while, is the direction and progress of your business:
- going exactly where you wanted to go and there have been no missteps or missed opportunities; and
- proceeding in a time-scale that is how you want to progress, not too slowly for what you want and not so fast that you are overwhelmed?
I believe if you are truthful, you would have to say that often, you are overwhelmed, that sometimes you are frustrated you can’t grow faster, and sometimes, you wish you were able to make decisions about what to do next faster.
Well, if you did answer honestly, then you should be interested in why a business plan can benefit your situation.
Here are 20 ways that having a business plan will benefit you and your business:
- It allows you to see the business as a whole – connecting all the dots in all the corners of your business with strategies that cascade out into tactics, that all work to move your business in the direction you want, at the pace you want.
- It defines your strategic focus – what you are in business for; your “why”, your brand and your unique selling proposition, so you develop your business in a way that differentiates you from your competitors.
- It allows you to set – and follow – priorities; it recognises you can’t do everything you want due to lack of time or other resources, so sets the priorities in terms of urgency and effectiveness along a defined ladder of what to do next.
- It allows you to manage change, by identifying what you need to do differently and tracking progress as well as monitoring for unforeseen effects.
- It develops accountability in your business because the expected outcomes are documented next to people’s responsibilities and timelines – you can manage your desired progress.
- It allows you to manage your finances, including cash, because the financial effects of your planned priorities are laid out and forecast ahead of time.
- It allows daily focus on what is productive and effective – will the work you do that day fit into the tactics of delivery and will those tactics lead to strategic objectives?
- It sets up milestones you can work towards along the way – it identifies key goals you can keep in sight and so be motivated to work toward.
- It defines metrics so that you recognise when you are meeting your “success” measures and when you are not and when to make corrections of strategy in order to do so.
- It will reduce the risk of your pursuing the wrong opportunities as the next trendy thing takes place – having a defined growth path will be a measure of whether the new opportunity can really improve on it.
- It provides realistic reminders, on a daily basis, of what we can and cannot do; it reminds us of priorities so that, on a daily basis, difficult choices – like choosing between speed or quality – can be made more easily.
- It can test the feasibility of your ideas, whether these are new products, new markets, or new ways of doing things.
- It will identify weaknesses – for example, it will show you that your optimal sales targets cannot be reached unless you invest more in marketing.
- It will help you understand where you stand in relation to your customers and your competitors – “just carrying on” will make you disappear in a crowded market place.
- It can help you to secure finance – banks and other lenders want to know you have a plan with what to do with the extra cash, where it will be spent and what will be achieved.
- It will be the foundation for the next stage of growth – as business plans are implemented during the envisaged timescale, your business will develop and change and a new business plan for the next stage will need to build on something.
- It can attract investors – negotiations with investors or prospective funders are better conducted if you can show where the business will go with their input, and how you can both benefit.
- It will change your business – in focus and the way you do things – and this will attract the best employees as they see what you are aiming to achieve and how it suits them, and at the least, it will reduce staff turnover that occurs when they see you don’t know what you are doing or where their careers will go.
- It will help you to forecast your staffing needs and the needs of your other resources so that you know when to get more of these resources.
- It will reduce the time you need to work on your business because you have already thought ahead, and you will spend less time agonising over what the right decision is whenever something unforeseen arises.
I challenge you to do this:
Read through that list carefully and tell yourself that you don’t need any of those benefits in your business or your life!
Read through the list and tell yourself that you already have everything mentioned above!
Read through the list and tell yourself that your business could not be better off by having at least 10 of the benefits mentioned.
If you can do that, then you really don’t need a business plan – but dare I say that if you come to that conclusion, you either already have a business plan, even if you don’t call it that, or you’re just plain wrong!
Imagine going to work every day and knowing exactly what you need to do, and what you need to do next, and what you need to do after that.
Imagine spending less time at work, because you know exactly what you want, and in knowing that, your next decision is made easier.
Imagine growing your business at a pace you want, toward the ultimate business you want to own.
Imagine reducing times when you feel overwhelmed to the absolute minimum.
If you want what you are imagining and you are not getting it right now, you need to do something about it.
This is what to do next:
Decide – Decide that you want to make a change. Decide that you will do what you need to do now as an investment so that you don’t need to do more in the future.
Decide what kind of a business you want at the end of the day, and how that business will benefit you. Don’t just think of financial success, what else do you want out of your successful business?
Do you want a reputation? Do you want to be recognised? Do you want more time with your family? Do you want to leave your business to your children?
Then set some time aside to work through your business plan – how you will get there. You will probably need about 8 to 10 hours overall if you are preparing a 12-month business plan. That’s where I suggest you start – until you become practised at the process of preparing your business plans, focus on a short-term business plan covering the next year.
Your 8 to 10 hours can be scheduled in a day, over a weekend, or even over 2 to 5 part-day sessions, whatever suits your time and business commitments.
Before you actually start your business planning sessions, I suggest you enrol in our free 4-part video training on how to write your business plan – you can start your training here.
The business planning process I recommend follows a simple 5-step process:
First, you get ready.
Make some decisions about the term of your business plan (how far do you want to look ahead?) and what the focus will be on. Is it intended as an internal document to guide you on your way or is it intended as a public document to show a bank or partner where the business will go?
Get your team together, book the sessions and venue, and gather background information that will help you in your deliberations such as your financial reports, lists of customers, lists of competitors, and so on.
Second, define exactly where you want to go.
In your first sessions, decide why you are in business – what is your purpose?
Do you want to leave a legacy, or to help your customers do or be something better? Do you want to enjoy life, work with people who are of the same mind?
Don’t just say “make money”!
Ask yourself why you want that money. Is it to prove your worth? Is it to give your loved ones a great life?
Make sure you describe the vision of what your business will look like in 5, 10 even 20 years’ time. What are you working to achieve in the business? Describe a typical day in the business in the future.
Then make sure you quantify what that vision means. Ask yourself what your customers will think about you once you have attained your vision? What will your employees think about working there? What will your finances look like? What key operating systems will be used to produce your success? The answers to these questions will; become the measurements to see if you have attained your vision.
Third, understand exactly where you are now.
Look internally and be honest about your strengths and weaknesses, in all the areas of your business.
What do you do well when you engage with customers and provide your service or sell your product? What can you improve on? What do you do badly?
What about the way you do business – the way your people work and how they work. What do you do well, and what can be improved?
Then look externally and ask yourself what changes are out there that may have an effect on your business? Will there be changes to legislation affecting your industry? Are there any impending technological changes? What about the political and economic situation – can they affect your business?
Identify the opportunities or the threats that these changes could represent.
Assess the internal strengths and weaknesses, and the external threats and opportunities, and see what you need to do if you want to get to your vision. Do you need to use more of your strengths? Eliminate some weaknesses? Take advantage of opportunities? What about the identified threats – how will you mitigate their effects?
Fourth, plan on how to bridge the gap.
Knowing where you want to go and understanding where you are now, you should be able to see what the gaps are between those two states.
Clearly define those gaps as goals and objectives, and then think about what strategies you can or should implement in order to bridge those gaps. What do you need to do to go from your current state of strengths and weaknesses to the identified measures of success in your vision? If your current state is in having poorly trained staff, and your measure of success in attaining your vision is to have employees who can help customers without you, then it’s clear you need to train your employees in what you know.
These strategies can then be broken down into tactical action plans for the year ahead – what milestones in each strategy will be reached in 12 months, and what are the steps you need to take to get there?
Prepare your budget so that you know what resources you need and when. Then document your plan so that it’s not just sitting in your head – waiting to be forgotten and unknown to your employees whom you need to help you implement the plan. Make it a public document that the people who are expected to implement the plan have access to.
Finally, implement, monitor, and evaluate.
Writing the plan will not make it happen.
Only following the steps recorded, at the times recorded will make it happen.
To do this, you can set up schedules and monitor how the implementation is proceeding. Set up measurements along the process and then review and evaluate your progress.
The military says that the best plans don’t survive the first shot. So, be prepared to monitor what’s happening and check on outcomes, and where necessary, make changes to strategies and timing. Don’t discard the plan the first time it goes wrong – ask yourself why something didn’t happen and adjust either your strategy or your procedure in implementing the strategy.
It’s not hard.
You know your business inside out. You have a step-by-step process you can follow.
Use the process and the knowledge of your business and combine the two into a forward-looking, predictive and focused business plan to grow your business your way.
The process is explained in my 4-part video training on ow to write your business plan. In the free training, each step is further explained and laid out so that you can watch and follow.
You can enrol to get this free training here.
Even if you don’t want to follow this free training now (and why would you not?!) go to my website at https://teikoh.com and sign up to get these free but valuable tips and tools to grow your business sent directly to your inbox. Maybe at some time in the future, you’ll decide you need to get your business growth organised and write a business plan – you can access this training there at that time.
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