(This article was published in the NZ Herald, August 27, 2014: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11314472)
Behind every successful business is a decent business plan. But how do you write a business plan? What should it look like and what should it cover? Check out this article I wrote for the NZ Herald and learn exactly what a business plan needs in order to make you the success you should be…
First up, what exactly is a business plan?
With a business plan, there is no set right or wrong look. The traditional business plan, which generally scares a lot of people, is often what I call ’28 pages long’ – as in it’s way too long and has all sorts of stuff in there that’s not overly important. Some people think being verbose is good, but I tend to think that a succinct plan is the way to go.
In its simplest form, a business plan outlines the goals of the business and the plan to achieve those goals. It should always have some financial aims in there too, which back up the goals and their achievement. Ideally it would be no more than ‘several pages’, preferably fewer.
Why do you think having one is important?
Every business – small or big – needs a business plan for a couple of reasons. Firstly, the power is in the business planning and strategic thinking required to put together a plan. You have to think about where you are today, what is happening both internally and externally, and what you could be.
Secondly, you want one as it helps to create some goalposts. It can give you a level of accountability to make sure you are on track, and doing what you should be to maximise the success of your business.
I’d say don’t be like the ‘normal company’ that does a traditional business plan for the bank and then never looks at it. You need something that’s going to be far more effective and that’s exciting, so you look at it – a lot!
If you’ve never done one before, how do you get started?
The classic approach is to do a SWOT analysis – looking at strengths, weaknesses, opportunities and threats. This has merit but I think you need to think more widely about what you are actually capable of as a business owner and as a person.
I’d say either create a business plan template that means something to you or find one that will work for you. There are various external experts that you can speak to also if you need a hand.
It’s one thing to have a plan, but how do you make sure the words translate to actions?
For a plan to be most effective, you need to have prioritised the most important elements so you can do the right things first. You also want to assign various areas of the business plan to specific individuals within your business. The other critical ingredient is to have timeframes in the plan to get things done.
Lastly, and maybe most importantly, you need to have regular reviews of the plan and to hold people accountable for delivering on their bits of it. Without accountability, it’s unlikely the plan will be implemented properly.
Things change, so how can you make sure the plan adapts to circumstances over time?
There is no right or wrong in terms of how often you do your business planning, but I would suggest doing a thorough annual business plan – usually in the last quarter of the current financial year, for the next financial year – then reassess it from time to time.
Some theorists believe a 90-day refresh of the plan is the right timeframe. Personally I would look at it at least every month to give it a slight refresh or update, and you should be able to do this in a non-onerous way. Your business plan should never stifle you, so if it does not feel right ‘today’ then update it and re-set sail.
Any other advice for small business owners on how to make business planning successful?
The biggest thing is to make sure the plan is alive, and it doesn’t sit on a shelf gathering dust. This means getting the whole team involved in being excited and accountable to deliver on the business plan. The business plan needs to filter to various areas of your business and these areas need to be held accountable to deliver their bit to the agreed timeframes.
I love the saying by Lucius Annaeus Seneca – some brainy Roman guy – who said ‘if one does not know to which port one is sailing, no wind is favourable’. As in, if you do not think about where your business could get to, you will never get to where you could have got. But if you have the right business plan for your business and you implement it, it will improve your performance – and in theory profitability – compared to not having one at all.
And if you’re still struggling or would like a bit of guidance on your own business strategy or business plan, please get in touch for business coaching or business advice: firstname.lastname@example.org or 021 775 660.