The fact is more businesses don’t have a written business plan than do. Many people think a business plan is only written when seeking finance. Others just can’t face the paperwork or get overwhelmed by the day-to-day pressures and just don’t get around to it.
But taking the time to write down your business plan could make the difference between success and failure. Having a business plan is the best possible way of developing a blueprint for the future of your business. It has been said that ‘If businesses fail to plan, they plan to fail.’
Having a business plan means:
- you are not the only one who knows what’s going on and what you hope to achieve in the future
- centres your attention on what you need to do to achieve your goals and helps you break that down into achievable tasks, reducing risks and stress because you will be confident that you are staying on track through the ups and downs and unexpected twists of being in business
- means that if you have to delegate for some reason, then you can be confident your team are focused on the right objectives
Business plans don’t need to be hundreds of pages and they don’t need to be pretty, desktop-published documents (unless you are presenting them to investors). They just need to:
- describe the purpose of the business
- describe the present and future shape of the business
- document the challenges faced by the business
- define short and long term objectives
- establish a framework for action to achieve those objectives
- set out performance measures which enable you to measure progress toward achieving your purpose
A business plan should describe the ‘now’ (where is my business now?), the ‘where’ (where do I want it to be?), and the ‘how’ (how am I going to get there?).
Once you have a plan, it is a good idea to check back with it regularly and to communicate it to your staff, offering them a chance to contribute to improving plans to achieve business goals. Some businesses break down tasks and scheduling into a brief list for a three month period. Reviewing this at regular meetings mean you can stay on top of what isn’t getting done, identify why and revise your goals accordingly. The three month action plan should cover business management, staff, financial performance and sales, product development and marketing.
There are many good templates available online for developing a business plan. Search and choose one that suits your needs or visit the Department for Manufacturing, Innovation, Trade, Resources and Energy small business gateway for a range of workbooks and tutorials in business planning.
A SWOT analysis is a useful starting point for developing a business plan. ‘SWOT’ stands for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is a simple technique for assessing business ideas, preparing or amending plans, problem solving and decision making, or making staff generally aware of the need for change.
Strengths and weaknesses relate to what is going on inside the business. Your strengths should include what you do best as a business, your best assets and products, while weaknesses are the areas or factors that could cause customers to go elsewhere. Opportunities and threats relate to what is going on outside the business. An opportunity will be a new trend or issue that you are well-placed to take advantage of (such as the growing number of health-conscious consumers, for example) or new products you are considering. Threats could include a trend away from demand for a core product or a change in the economic climate.
By taking a look at the internal strengths and weaknesses of your business, and the external opportunities and threats you face, you will be able to build on the strengths, address the weaknesses, seize the opportunities and defend your business against threats.
Important people to have on your side:
- bank manager
- your family
- business coach or mentor
- network of like business owners
- industry associations