If the answer is not recently or I do not have one, then you would not be alone. But now is the time to change that, if you want to take more control of your future success.
Do I really need a Business plan?
Forbes recently reported that 70% of small businesses fail before their 10th anniversary without a business plan in place. As a business owner or leader you most likely have the plan all mapped out in your head. In doing so there is the likelihood you could be missing something which would accelerate your business performance.
So in answer to the question, my advice is always YES absolutely, write your plan down. Not only is it one of the best ways to hold yourself accountable, not having a documented plan is one of the most common reasons for businesses failing.
Creating and maintaining a live business plan is in my opinion, one of the most important steps to a successful business, whether that’s as a start-up or an established company. When done well, the plan connects your financial numbers to your actions, making it absolutely clear where the business potential sits, what the risks and opportunities are and how the financials stack up to deliver both short and long term goals.
Is writing a business plan hard and time consuming?
Not if you have a clear vision for how you want the business to shape up for the future. If this is backed up with knowledge of the market in which you trade, insights as to what your competitors are up to, an understanding of what makes your customer tick and a tight grip on your financial performance, then you are in a strong position and it won’t be too much of a burden on time.
For those creating a business plan for the first time, it can be daunting and requires committing a block of time away from the day to day. Pulling together the relevant information for the market, customers and competitors to give a robust factbase of knowledge from which to make decisions, will take time to do, but an investment in your future success all the same.
My personal experience of running businesses, is that it is worth the time spent, as it make you think differently, challenges embedded perceptions and you take onboard new learning as part of the process. Ultimately it gives greater focus on where to invest money and time, as well as flagging what to stop doing.
If you are planning to update or start your business plan and would like me to help, please do get in touch. Over the years I have written many plans, so can offer support in writing the document and an independent perspective on your thinking.
What are the 5 main advantages of having a business plan?
- Seeing the whole business – It can be very easy to become so immersed in the day to day of the business that opportunities are missed, and risks identified too late if you don’t have a complete view of all aspects.
- Setting priorities – Documenting the plan, joining the dots between the who, what, why and how forces you to stop and consider the structure, goals and direction you are heading in. Also to reflect on where successes and failures have shaped the current business, before setting out short and long terms priorities.
- Giving strategic focus – A well thought out plan helps you to step back and think objectively about the key elements of your business to inform decision-making on a regular basis. Failure to Plan is Planning to Fail!
- A benchmark to measure success against – by its nature, a business plan will contain a number of assumptions and expectations about how the business will move forward. Checking back to these will enable a proactive approach to adapting to changing conditions and make the need to change course clearer.
- Develops your investment narrative – When sourcing funding, submitting a grant proposal or meeting with potential investors, they will all want to be convinced of the potential and security of a positive return. A robust and current business plan will support the creation of a compelling and exciting pitch.
What makes a good business plan great?
Lets face it if you are investing the time and resources into documenting your business plan, there is no point doing it as a tick box exercise. It needs to be written with its future audience in mind , pre-empting and answering the potential questions of all stakeholders, enlightening and reassuring them.
My advice is therefore to make the plan Investment grade. In doing so you will be demonstrating your depth of knowledge of the market and creating excitement around the financial opportunities and future of the business.
Opening with a well-articulated explanation of the problem you are solving for your customers, gives instant clarity of the value proposition you are delivering. When matched with data on your true addressable market and how you have achieved sustainable competitive advantage, it will be clear for any reader what the growth potential is (including yourself).
One of the sections I find often undervalued is showcasing the experience and passion of the Senior team. If you’ve watched Dragon’s Den, you’ll know that investors invest in people, which is why demonstrating the experience, passion and commitment of the core team and advisers is so important.
The final point to make your plan great, is have the plan lead the numbers rather than the other way round. Wherever an assumption or statement about the future of the business has been made, make sure this is reflected in the financial forecast, cash flow or funding requests.
I provide strategic business advice, with practical marketing support for ambitious businesses looking to create value and win new business. If I can be of help by offering guidance, independent advice or practical support with your plans to bounce forward, please do get in touch.