A business without a plan is like driving a car at night without the headlights on. Your chances of seeing where you are going are pretty slim and the chances of something going wrong are pretty high. So what is a business plan and how will it help you to see where you are going?
Sometimes a business plan is seen as a means to securing finance. Once you have got that finance, you file it away and don’t revisit it again. Instead, it is a step-by-step guide to running your business and creating a product or service that is going to make it in the market place. Like any plan, your plan will need to be reviewed and adjusted regularly according to the vision for your business, conditions and opportunities in the market place and your business’ current condition.
Whether your plan is formal or informal, every business does have a plan. It’s just how effective that plan is. Before setting up a new business, a proactive business owner will assess things like the need for their product or service in their chosen area, the ability to attract new clients, how many staff they will need and how much it will all cost. On the other hand, a reactive business owner will wait to figure these things out using trial and most likely error. They will be lucky to be left with their wits intact, much less any clients!
A business plan will help to minimise any pitfalls. For many business owners, the concept of writing a business plan is a task that is put in the “too hard basket”. Perhaps it would appear much less daunting to view the process as simply answering these three questions:
- Where are you now?
- Where do you want to be in the future?
- How will you get there?
Answering the question “where are you now?” is often seen as a major stumbling block as most people don’t know where to start, but it must be your starting point. The question is easier to answer if you divide your business into four key areas: operational, marketing, employees and finance. By doing this it allows you to analyse your business, or potential business, to create a solid planning base.
The next step is to look at “where do you want to be in the future?” This question is asking you to visualise your business operations at a date in the future. It is almost like the exercise of setting personal objectives. The difference is that the focus is on your business objectives.
Now you need to look at “how will you get there?” This is the steps you will take in order to achieve the business objectives you have set.
Whilst you may have considered these things informally, it is really important that you write everything down. This will formalise your plan, reinforce your vision and give you a benchmark to check your progress. It will also most likely identify factors you had not previously considered when creating the plan in your head. Writing down your business plan will make you accountable and it will dramatically increase your chances of success.
We have helped many clients to formalise their business plans, so give us a call to see how we can help you too.