Let’s talk about business plans. Before you roll your eyes and think “Bah – not more admin!” – here is why you should have (a good) one.
The thing about business plans is, it’s the process of writing one that holds the real benefit. The document itself is just the end result. So if your aim in writing a business plan is just to slap something together because your banker said you needed one, you aren’t going to get much out of the process and you may as well not waste your time.
The process involved in writing a good business plan involves looking at the big picture, which is something that often gets overlooked in the daily grind. It identifies and clarifies goals, it maps out the way to achieve them, it provides insight and deeper understanding of business drivers, and it highlights shortfalls and determines how to overcome them. A business plan (your business in a nutshell) is huge, but the document doesn’t have to be.
A lot of people seem to think that their business plan needs to be a manifesto, outlining their plan for world domination. But a realistic document with genuine and achievable goals, even if your goal is as simple as maintaining your current market share or workload, is far more valuable. It should clarify what you really want and expect to be able to achieve over the short, medium, and long term. Don’t think you need to impress anyone with your goals – a solid business plan that shows how the status quo will be maintained, if that’s what you want, will help you far more than a textbook plan that outlines
It should clarify what you really want and expect to be able to achieve over the short, medium, and long term. Don’t think you need to impress anyone with your goals – a solid business plan that shows how the status quo will be maintained, if that’s what you want, will help you far more than a textbook plan that outlines airy fairy ideals which have little relevance to your business.
If you google business plan template you’ll have results coming out your ears, and a good business plan will include many of the elements you’ll find in your standard templates – it will look at strengths and weaknesses, it will outline goals, identify your target market. But in order for a template to become a good business plan it needs to be adapted and personalised to your business, most importantly it should:
Be in your own words – there is no point in your plan sounding like a textbook because textbooks are for school, and your business plan should be based in the real world. It needs to make sense to you and accurately reflect your business.
Outline genuine goals – what is it that you really want to achieve? Don’t get caught up with what you think your goals should be. If you want to expand, great! If you want to achieve steady performance over the next five years, that’s fine too. Be honest.
Work the way your business works – you know what works for your business and how it operates. This is not to say don’t try a new approach, the whole point is to try to improve, but outlining a plan that would require a fundamental shift in the way your business operates is not based in reality.
Be well researched – you need to make sure to question the premise your plan is based on. Relying on a belief like “we have loyal customers” or “we’ve got the best product”, can be extremely dangerous unless you are absolutely sure that the statement is correct. Do you have loyal customers? Or is it just that you are their only option at this point in time?
Be broken into manageable parts – so you’ve outlined your goals, which is great, but unless your plan then breaks things down into manageable, actionable portions, it’s not really a plan. It’s all good to say your goal is to grow sales by 20% but you need to outline the steps to take to get you there or you’re likely to get to the end of the year and find you’ve drifted pretty far off course.
Work within your individual parameters – your plan needs to be relevant to the individual factors that impact your business, for example, your business might be located in an area/market where you need to rely on customer loyalty more than getting new customers, so focusing your plan on customer growth is like trying to fit a square peg in a round hole.
Be shared with the right people – one of the other benefits of a business plan is that it gets your ideas out of your head and onto paper, and they can then be shared with the people they impact. This doesn’t mean give everyone a copy, but there’s no point aiming for the best dispatch service if no one tells the guys in the warehouse that this is the goal, or a BDM having a huge target, but no one telling the support staff.
Be reviewed regularly – after all, it is the process that provides the benefit.
The main point to take away is that the process of creating a business plan is a very useful and practical tool. It clarifies your thinking. It helps you determine the next steps to take. It keeps you on track. But here’s the catch – it has to be a good plan. And there is a big difference between a good business plan and a bad business plan.
Don’t bother with a bad business plan. There’s no point.
In 2017 we re-branded to better reflect our services, changing our name from CAV Consulting and Analytical Services to Insight Business Plans & Analysis. This article was originally published under our previous name.