“It takes as much energy to wish, as it does to plan!” said Eleanor Roosevelt, a trail blazer for women to aspire. Eleanor knew the value of a good plan and rather than wishing things would change, she had a plan and made things happen! So if you haven’t got a plan in place already for your small business, starting and completing one, will make help ensure your business is set up to achieve its maximum potential from the outset.
What is a business plan?
A business plan provides direction and keeps you on track in achieving your ultimate goals in business.
It’s a written down road map, detailing tasks you need to undertake to reach your business goals. And provides a strategy or path, in how you are going to achieve those goals. A business plan will include the strengths of your business, as well as the challenges your business faces, and how you as a business owner plan to overcome these challenges in order to realise the full potential of your business.
Your business plan doesn’t have to be a long winded essay, it can be short with key points. But most of all, it needs to have been put together with an honest assessment of your business position, and be a final game plan of how you want to play to achieve your business goals. Your business plan shouldn’t be a novel, keep it user-friendly so that you will continually refer to it as you encounter various challenges.
However, if you are writing your business plan for use by third parties, e.g. secure capital or debt, you may want to formalise it further with a more detailed approach.
Tailor the business plan to the end user needs, if it’s you as a business owner then you will know what you need to document to keep on track, however if it’s for external parties (for financing reasons) assume they know nothing about your business which means the business plan may need to be a bulkier document.
Before you can write down your business plan, you need to think about your business and where you want to take it. By critically brainstorming and jotting down the ideas and thoughts that come into your head, you will be able to then formulate a plan with a bit more ease and with an ultimate end stage.
If you have employees or stakeholders that know the workings of your business, consider asking them their take and perspective on how business is going. Ask them to list the challenges they believe the business faces, but also highlight the businesses strengths.
By having everyone perform a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, you will have a broad framework of what needs to be included in your business plan to achieve your end goals. Check out my downloadable SWOT Analysis here.
This will essentially form a health check on your business position, leaving you with valuable information to be included within the business plan.
Understand your market and cycle
Got you crystal ball ready?? This is the part of a business plan that’s a little more subjective, and requires you to make assessments and projections about the future market condition of the sector your business trades within.
Seeking external expert advice on for projecting market cycles may help obtain a more accurate picture but make sure you seek out someone who knows something about the market you work within. Talk to other business owners within your industry and get a feel for their take on what’s going on within the market, this will help you formulate projections in order to achieve your goals.
An alternative to external advice is to regularly review your plan every 3 months to ensure the information you have projected appears on track. 3 Months, or 90 days is enough time for you to implement goals within the plan, however not so long as to make the plan obsolete should things not turn out as predicted.
Consideration also needs to be given to other external economic factors such as, interest rates, consumer spending habits, and to some level the overall economy. Essentially if there is a decline in the average house hold income, how is this going to impact your business in relation to the sales and services you offer? If you provide a luxury item, is it a necessity for people on tighter budgets? This kind of thinking will allow you to critically evaluate how your business is likely to perform in order to achieve your overall business plan.
The more you know about various markets and cycles and the impact it has directly on your business, the more accurately your can predict sales and potential profits in the periods ahead.
Including some “fat” in your budget will ensure that there is a buffer financially factored in, should things not go according to plan. Starting or improving your business, (this is the aim of preparing your business plan right?) will always cost more than you anticipated. So ensuring you have enough cash flow and working capital to get through your start up phase is imperative, especially if your business doesn’t prosper initially as anticipated.
Read my article here on The Reasons for Business Failure, and ensure you take them into consideration when formulating your business plan.
Put your plan to paper!
After taking the above steps into consideration and with your framework coming together nicely, it’s now time to put pen to paper and complete the overall business plan.
The questions you need to ask while formulating the plan are:
- What does your business stand for? What does it (or you as the owner) believe in?
- What makes your business different? Do you deliver a better service and quality product than competitors? How is this marketed?
- Is this your passion? What is your reason for bringing this business to life? (If you don’t believe in it, your customers will be able to tell, so why should they come to your business?)
- What is the purpose of your business? To provide solutions for people’s problems? To improve life? To improve the environment? Make sure your brand and marketing reflects that.
- What are your goals? Where do you want to be in the short term (3 months)? Mid term (6 months)? Longer term (12 months)! With things changing so quickly these days and technological advancements, having a detailed 3-5 year plan is not really necessary, as it is likely to become obsolete. It’s absolutely fine to have long term goals, however the path in which you take to get to these goals may change, hence breaking these down into smaller achievable chunks with a shorter term focus will ensure you are able to remain on course to achieve them. Your business plan needs to be agile, and is allowed to be flexible to allow for the ever-changing business environment.
- How are you going to meet your goals? What needs to be done to achieve them? Do some goals need to be met before others take place? Be task orientated when setting out to achieve your goals. Try following the SMART criteria when setting the tasks, Specific, Measurable, Achievable, Relevant, Timely.
Once you have answered the above, and set out your goals in an order that allows you to achieve them, your plan should come together nicely. Consider getting some feedback from internal and external stakeholders in regard to the plan and take on board suggestions to improve as required.
Remember your plan is a living adaptable document, and should be reviewed regularly to ensure it is still relevant and your business is still on track to achieving it. Monitor your progression accordingly and if something isn’t working, try something else. Your plan is not ridged and your business shouldn’t be either.
Consider the external factors regularly as well, how is the industry performing, and is this accurately reflected in our plan. Assess and then re-assess your goals to make sure they are still relevant and your plan is still achievable.
No business plans are the same, and no two businesses are the same. It’s the people within the business that give it its heart, and its this human factor that means that things don’t always go to plan! If you need help ask for it! If you aren’t achieving your goals, reassess them! And if you aren’t progressing consider getting some advice.
Mumsonline.com.au aims to provide you with the tools you need to be successful in any business you are passionate about. Please feel free to use the tools. If you need any business assistance, mumsonline.com.au also provides Business Coaching services, and this may be just what you need to get your business on track and moving forward, email inquiries at email@example.com.