Failing to Plan = Planning to Fail
This information is designed to give you insight into the benefits of completing a business plan or, at the very least, detailed ‘action plans’ for the future of your business.
You see, regardless of whether it’s a 120-page document or a 4-page ‘Action Plan,’ the point is, planning is essential to the successful growth and development of your business, your team, and your long-term future.
You’ll discover how and why this is so for you and just what the fuss is all about! You’ll find out how to construct a draft business plan and how to use it to your best advantage.
Positives and negatives—an out-of-balance equation?
When business owners are asked, ‘What are some of the positives about being in business?’ many reply:
- Being my own boss
- Financial reward
- Greater income
- Lifestyle and more free time (often said tongue in cheek!)
- Personal satisfaction
- A challenge
- Building a future
When asked, ‘What are some of the negatives about being in business?’ many reply:
- Long hours
- Financial risk
- Personal risk
- Less time for family
- Dealing with customers
- No vacation
- No sick pay
- Feeling out of control
- The ‘buck stops here’
- Full responsibility
- ‘Red tape’: government bureaucracy
- Bad debts
- Fighting day-to-day fires
Interestingly, the negatives always far outweigh the positives.
Staff and customers almost always land on the negative list, and many business owners also mention a sense of isolation.
This is a situation that must be reversed for you to realise your dreams within your business. Business planning can help you do that.
Business planning is designed to MINIMIZE the NEGATIVES and MAXIMIZE the POSITIVES.
It is designed to help give back to you an experience of all the positive reasons why you went into business—a better lifestyle, greater income, more freedom, a sense of confidence that comes with being your own boss, and more—by reducing the negative issues in your business.
Imagine a journey.
Imagine you’re going on a journey. What are the 2 key things you need to know before you go on any journey?
How you’re going to get there, how long it will take, how much money it will cost, who will be going with you—all are important considerations. However, there are 2 key things you must know:
- Where you’re going.
- Where you are now.
When you think about it, these are the 2 most critical points. A business plan is designed to map out that journey.
In fact, it maps out where you are now, where you want to be, and the strategies to get you there.
Establishing where you’re going involves identifying, say in 2 years’ time, what you want your business to be like. What kind of turnover, profits, number of staff, location, equipment and resources, debt levels, and so on that business will be doing by that time.
Another important question here is, what will you be doing? Will you be still be involved on a day-to-day basis, or will you have replaced yourself with a manager? Or perhaps you plan to sell the business by that time. Regardless, what about you?
To gain greater clarity on these issues, this can be taken a step further. What level of income, profits, and lifestyle would you like to achieve from your business? Once you have those issues clear in your mind, it’s time to turn back and review the business.
Now consider what turnover and profit the business needs to be doing to deliver that. What does it need to be like to fulfil your goals? So, rather than you, as the business owner, giving the business all your energy and resources, what returns would you like the business to provide?
From here, the business plan maps out HOW to achieve those goals. That is, what strategies and ideas will be used in every area of your business to take the business from where it is now to where you want it to be in a certain period of time.
As such, a business plan can provide clarity about your future and the future of your business that most business owners lack. This can place you ahead of your competitors as well.
What does a business plan do for me?
1. A plan gives focus and direction for you, your staff, and your business.
2. It’s a step-by-step guide to your future.
3. A plan creates a more successful business by turning your staff into a ‘team.’
4. A plan identifies opportunities and coming challenges for your business.
5. A plan favourably impresses key people of influence.
6. A plan brings together all the elements of your business.
7. A business plan increases your income.
10 pivotal steps to your plan
1. An executive summary
This area provides an overview of the business as a whole and is drawn from the rest of the plan.
2. Your business profile
This area includes a description of your business, the legal structure, the background of the business and the owners, and more. It also includes strengths, weaknesses, opportunities, and threats; business objectives; etc.
3. Your products and services
This section offers a description of your products and services and the benefits customers can expect. It should also outline any limitations and a review of your industry.
4. Your marketing plan
Here, you need to conduct a full review of your current marketing strategies. It’s important to review your customer profile, competitive analysis, and advantages or disadvantages. It should also include sales forecasts, selling and distribution methods, packaging, pricing, and so on.
5. Your operations plan
Here you’ll review your current performance in a variety of operational areas. If you have a service based business, there’s still a production process. At the end of the day, you produce something in exchange for purchase; as such, there must be a process. This section looks to improve the way you do things—efficiencies and so on.
6. Your management & personnel plan
Here you talk about the management style within the business, expectations of the owners in the short and long term, supporting business advisors, all staff details, and training.
7. Legal considerations
Here you review the legal structure of the business. And make sure you’re protected from industrial relations challenges, false marketing practices, workplace health and safety—and that you met any necessary standa
8. Your financial plan
Historical data—ideally the last 2 to 3 years’ profit and loss and balance sheets—will be used, along with the marketing and sales forecasts, to map out a 2-year financial plan for the business. Profit and loss and cash flow budgets need to be forecast for every month for the next 2 years.
Regardless of what happens, this financial plan will not be out of date as soon as you exceed or fail to reach one target. Rather, it’s a tool to check and correct your activities based on the financial results achieved.
For example, if the goals aren’t met one month, it’s important to review why, correct it, and then take action to compensate for it the next month. Or if they are met, it’s an opportunity to pat your team members on the back and congratulate them for a job well done!
9. Your action plans
This is a specific list of all the strategies and items you’ve planned to take your business from where you are now. It’s a good idea to rate these ideas in order of priority, who’s responsible, and by when.
10. Your risk & contingency plan
This is essentially ‘Plan B.’ This section covers all those areas most business don’t want to look at—partnership contracts, insurance, what to do if the business plan goals are not achieved. This also sets out the amount of risk the business is carrying and plans to compensate or address those issues.
Our way of doing things is unique and it’s why it produces unique results for our clients…
We would love the opportunity to help you clear your head on what is the right way for you to accelerate your business…
We highly recommend you watch this step-by-step case study of how we grew Beefy’s Pies into a Famous Aussie Icon from a small stressed out bakery into a family owned chain. Click here to get all the insights into their success…
Or if you have heard enough about how we work with our small business owners, then let’s have an off the record chat about your current situation and see what we can do to immediately guide you…click this link to see what time best suits you.
P.S. Ask if our Boardroom Program intake is open for enrolments…It works best for business owners who see the benefit of having us on as their ‘external partner’ so that they are not alone in the day to day decisions of their business.