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Do I need a business plan?

It is easy to think that just because you own or are part of a small business that you don’t need a business plan or that a business plan won’t be relevant. Likewise, if you’ve seen repeated success without a plan, it doesn’t mean that success will continue.

A business plan will help accelerate your business growth, and development, whilst potentially saving time, effort, and money in other areas.

Here’s 6 reasons why you should consider investing the time and resources required to build an effective business plan:

  1. Survive, strive, and sustain!

Businesses that invest their time and resources into effective planning and implementation can focus the business on its goals, strategies and supporting actions to ensure the business’s survival, success, and growth.

A business plan should be the master document containing the businesses current position, the broader market, and the detailed steps the business will take to improve performance over a defined period.

The process of writing the business plan is the most important step followed by regular reviews and progress tracking. Studies have shown that companies that plan and regularly review their results really do grow 30% faster. Interestingly this same study also found that business planning benefited existing businesses more than it benefited start-ups.

As businesses continue to face the challenges brought by COVID-19, business planning has never been more important. Business planning now should assess what needs to be done to survive the coming months, having understood the impact COVID has had on your business, what can then be done to re-grow and how this level can be sustained until the business can take its next growth steps.

2. Spending made easy.

A business plan isn’t a document you produce to predict the future of your business. It is a guide and a roadmap that is updated as the business progresses towards the goals and overall strategy. This means that there will still be times where decisions need to be made that haven’t been considered in the business plan.

  • Is it time to hire a new employee?

  • Is it cost effective to change locations?

  • Is now the time to purchase new equipment?

As businesses grows the number of decisions business owners and stakeholders must make also grows. If you regularly review and update the forecasts you mapped out in the business plan and spend the time understanding and monitoring the cashflow, you can make these decisions with confidence and in the context of the wider business plans.

3. It’s risky business.

Even from within your own business there is so much you don’t know, especially when you’re just starting out. How do you build loyalty with customers? What impact are our competition having? How do you improve your operations?

Building the business to a point whereby you can hire talented individuals that bring new expertise, complement your skills, and can support your business strategy, will help provide solutions to some of the questions you have around your business. In the short-term consider where consultants or contracted help can help support you in your business growth.

Until that point, it’s okay that you don’t have all the answers! You signed up for uncertainty when you started your business. Creating and reviewing your business plan on a regular basis is one way to uncover any areas of weakness, assess the assumptions you may have made in your plan and develop contingency plans. Take control and take action!

4. A singular view.

A business plan is a great tool to make a clear connection between investment and reward. The pay-off mentality will help ensure you’re setting up yourself and your business up for success.

Ensuring you work this way enables you to assess which goals are going to need more investment in time, effort and money compared to the likely reward. As you progress you may decide to adjust the investment to maximise the returns or completely remove actions that no longer offer the right pay-off.

When you have set out everything you want to achieve, the rewards, and the steps required to achieve the rewards, the investment, you should summarise your overall goals with a single strategy.

This approach will enable you to create a singular vision within the business and ensure everyone is on the same page, working towards a common goal. You will have overall control of the plan, but your team members will be responsible for their own parts of the business plan. They can see where they need to focus and how it will benefit them and the business in the long-term.

Remember you can be the owner and the employee in this! This process still works. You will just be breaking everything down into bitesize pieces whilst ensuring you’re focused on the outcomes.

5. Realism is essential!

There is little point creating goals that are unattainable or producing forecasts based on the best possible outcome. Your business plan should be a stretch but achievable.

Including your thought process, considerations, assumptions, and potential areas of concern upfront will help you deliver the plan with caution and achieve the required results.

Setting clear milestones and ensuring its clear what good looks like, will help ensure you, and the team delivering the plan are aligned. The milestones within the business plan should then help to create meaningful goals and help guide your sales, operations and marketing strategies.

I am sure it goes without saying, but here I am saying it… your business plan must include SMART goals and milestones.

  • Specific

  • Measurable

  • Achievable

  • Relevant

  • Time-based

This is a proven structure for goal setting. Combine this with my other point above and you will avoid building your business plan whilst wearing rose tinted glasses.

6. The next step.

Having a business plan in place will set you up ready for your next step. This may be to seek investment ready for expansion or it may be to sell your business. Either way you are more likely to be approved for a loan or appeal to more buyers if you have a clear business plan and can demonstrate your systemised approach to growth and sustainable results.

Ensuring your business plan clearly demonstrates your business model, your financials, your target market and your potential to grow and scale, will help make the plan a reality but will also be a valuable tool as you ready yourself for the next step.

Every business, regardless of size, can benefit from a structured approach to growth, a guide map to support business decisions and a tool that helps measure performance against targets.

Business planning doesn’t have to be time consuming and it certainly doesn’t have to be a 200-page document. Keeping it clear and simple and reviewing it regularly, is essential.

Your business plan should be a tool for you and your business and whilst it can be daunting starting with a blank page, the key is to just start. It’s not as hard as you might think and there are so many free online resources to help you if you want to create your plan yourself, or there are specialist consultants that can help you create the right plan for your business.

Call us on 01296 681341 or contact us to find out more about our business planning services


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