If I had £5 for every time over my career I asked clients whether they had a business plan only to be met with a negative response or a blank expression, I would probably have been able to retire by now!
After all, a business plan is just something you write to keep someone else happy, like a bank manager or grant provider, isn’t it?
Well actually, no.
Whilst I accept that a bank will ask for a plan, especially if you are asking to borrow money, why wouldn’t you have a business plan anyway?
Let’s liken the running of your business to a car journey you might be going on for a holiday or family visit. You don’t expect to sit in your car and suddenly arrive at your destination – you plan. Which roads do you need to take? Where will you stop for breaks? What if your preferred route is blocked for some reason? You think through all these things before you set off. Planning a business, no matter what stage it is at, is really no different.
You know where you are now. You have hopes and aspirations for yourself and your business – where you’d like to be in one, three or five years for instance. The aspirations might be quite straightforward such as “I want to be making £35k profit in year two” or “I want to have a 15% market share by year three”. So how will you get there?
This is where a business plan comes in.
Let’s go back to the car journey analogy for a minute. You need to make a 600 mile journey that may take as much as 12 hours including stops for fuel (for you and the car!), rest breaks and so on. So you plan your journey. Before you set off, you make sure you have fuel, adequate tyre pressure, things you might need in the event of a breakdown or lengthy delay.
Your business is no different. What do you need to have or do to achieve what you want? This could be staff, time, money or equipment for instance. How much of each might you need? When might you need them?
Of course, let’s not forget customers to buy your product or service. Who are they, where will you find them and how will you engage with them?
All these things need planning. Notice, I’ve deliberately avoid using the phrase “thinking about”. Too often, I meet people who carry their business plan in their head. Not a good idea! Great thoughts and good ideas can be lost as others occur. If you write a plan, it clears your head (or put another way, frees up space) for other thoughts, plans and ideas.
The other great advantage of having a written plan is that it enables you (and others, if you are seeking opinions) to take a detached view and give yourself a “sense check”. Will that really work? Is that project’s time scale realistic?
So hopefully by now you’re grasping the message. To use an old adage, “Fail to plan, plan to fail”!
I could say lots more about the actual plan content, but I don’t want to overdo it here. Suffice to say you need to include sections on your market, customers, resources, product, your strategy for winning business, how you will keep clients etc. The list goes on but the important things to remember are:
- This is your plan, so needs to be in a style that suits you (you can always tweak it if a particular audience, such as a bank or investor needs a copy).
- There is no right or wrong length of plan. Let it say what needs to be said and no more.
- Have a “plan B” that covers the “what if” scenario. This will enable you to change course if necessary.
- Finishing the plan isn’t an end in itself. It’s just a beginning. Keep revisiting it. Keep it flexible. Make sure you’re on track to where you hope to be. If not, like any journey, be prepared to change course if that’s what’s needed.
Enjoy your planning.
From Nwes Business Advisor, Vic Short.