Business Plans – Why do I Need One of Those?

When he delivered his famous speech on the steps of the Lincoln memorial in 1963,
Martin Luther King did not say “I have a strategic plan” but to achieve his dream he undoubtedly had a plan.

Or to use another well known saying not having a plan is planning to fail! So it’s a really good idea to have one.

Business Plans

‘Oh not again’ I hear you say – ‘another business advisor touting for work to help produce a business plan for my Company’. But you already have one, if not on paper then in your head. Unfortunately having it in your head is not good enough unless your staff are mind readers.
You may not want to invest the time to produce the plan but you need to. Unfortunately most businesses only produce business plans to satisfy banks or investors and then forget they have it. They fail to realise that the valuable information contained in the business plan is how and what you need to do to make your business successful.
Anyway would you really set off on a journey not knowing the route you were going to take to your destination?

What should I put in my business plan?

Having said most businesses produce a business plan to satisfy their investors the recommended content is sound and should include:

• Background
• What’s your business going to do to make money?
• What makes you believe it’s going to work?
• Finance required
• How much money do you need to get started or carry on for 5 / 10 years?
• Don’t forget working capital
• Financial summary
• P&L
• Balance sheet
• Cash flow
• Key staff
• Who’s important other than you?
• Organisation
• Roles, responsibilities and accountabilities
• Aims and objectives
• How big do you aim to be?
• How much money are you going to make?
• Time lined objectives to get there.
• Products and services
• What’s the business do?
• Purchasing
• Cost of supplies
• Dependencies
• Risk
• Processes and assets
• Key equipment
• Key processes
• Sales and marketing
• What’s the offering?
• What’s the Unique Selling Point
• What’s the size of market you’re going to penetrate?
• How you’re going to penetrate the market?
• Sales tactical plan.
• Ongoing marketing - presence
• Notes and assumptions
• Reminders

What needs to happen?

So whether you are a manufacturing or service business and no matter what size of business you are, you need to give some thought to all of these. Having done that put it into a document that is easy to read, simple, factual and accurate. You’ve just produced the most valuable piece of information about your business.

Why don’t we plan?

So if it’s that easy why don’t we do it? Well it’s like any sort of planning we don’t like doing it because:

• It takes time
• It’s complicated
• It puts down a marker and ties us down - commitment
• Gives a mechanism for measuring where we’re up to and what we’ve done
• We find it difficult
  

There may be others but if you’ve taken the time to produce a robust plan then keep looking at it and reviewing it. Don’t let it collect dust in the bottom drawer of your desk

Planning – it can be simple!

Planning is all about resources, tasks, timescales and milestones but none of these are much use if you’ve not adequately described what it is you are trying to achieve. This must be the starting point for your business then the plan is developed by addressing the obstacles to achieving your goal. The resulting intermediate objectives can have resources allocated to them, estimated timescales for completion and can be logically ordered to achieve your goal – it’s your plan!

Are you getting there?

So you’ve got a plan for your business and you look / review it regularly (we would recommend at least once a month– it may need modifying).

Your review may be made easier by developing a set of key performance indicators (KPI) that tell you if your business is on the right track. These can be made up of measures about the business that are generally fixed elements (order book, orders in, despatches, on time delivery performance etc) and those which measure progress on problems – these will change periodically.
It may be useful in developing the KPI’s for your business to consider the areas of The Balanced Scorecard developed by Kaplan and Norton, EFQM and other change models e.g.

• Leadership
• People
• Process management
• Customer focus
• Quality tools
• Business priorities and results

Where to from here?

Well you have a plan, stick to it, review it regularly, modify your route if necessary and know where you’re up to at any moment in time.

Good luck and if you need help you know where to find us.