Business planning – is it just a paper exercise?
Have you ever notice that the very mention of the words “Business Plan” makes people cringe, glance away, mutter…hop on the nearest train to a parallel universe?
What is it that makes people so uncomfortable? Personally I think it is that many attempt a business plan, most write it down…and then promptly forget about it. Generally it is prepared because of a specific need like applying for credit or a grant or maybe an award. Maybe you think I am being unfair and are full of righteous indignation right now but seriously, hand on heart, can you say that your business plan (that’s if you have one) is a living, changing thing that reminds you of your goals, directs your actions and charts your progress? Because that is what it should be!
And do you know what? It doesn’t have to be a document as such. It can be anything you want it to be as long as it does its job.
Just to be clear its job is this:
- To let you take stock of where you are now
- To identify where you want to be at a given time in the future
- To figure out the road map that will take you there
- To identify the obstacles that could potentially get in your way
- To put in place contingencies for dealing with those obstacles
- To review and track progress
- To identify when you need to alter the road map and maybe even the end goals
- To move forward again on your road to success
I have seen so many people get bogged down in the structure of a business plan. In trying to fit their own thoughts and words into someone else’s ideas of how it should be. But it doesn’t have to work like that. What is most important here is that you do the thinking required to go through the process…and that you keep doing it. Business planning is a continuous process, not just a once off start of year exercise.
So where should you start? Well a colleague of mine, John Crawley (co-author of the Profit Mindset) always asks the same question – “What is your number?”. Let’s face it…whether yours is a lifestyle business or you have hopes of going global you are in business to make money. We all are. So there should be a figure which represents what your business needs to generate. This figure needs to take into account the amount you want to take out of the business (profit) and the cost of doing business. Clearly theses figures will be different for everyone. But this figure that your business needs to generate – that is YOUR number. Know it, live it, breathe it.
Everything else in terms of looking back and going forward really hinges on that number. So that is your starting point. Now think about the last year. Reflect on your performance and on your business performance.
- Did you achieve your goals?
- What got in the way?
- What went well?
- What went badly?
- Could you have avoided some of the negatives?
- Were there missed opportunities?
- Why didn’t you capitalise on them?
- If they came up now could you grasp them, and if not, why not?
You really need to look at the broad spectrum of things that affect you and your business here if you want a good clear picture. Consider the following:
- Family obligations and pressures
- Financial concerns
- Self confidence and self belief
- Your skills and knowledge
- Willingness to seek the help of others
- Your relationships with others
- Your commitment
- Product / Service offering, quality, pricing etc
- Employees (or lack of)
- Financials and availability of credit
- Methods of generating business and building brand awareness
- The economic climate – how has the recession impacted?
- Changes to legislation and government policy
- Changes to buying trends, technology, consumer demand, buying power etc
- Relationships with others
Once you have reviewed and taken stock of where you are now you should have a good base for planning forward. Given the current climate 2 or 3 year plans are probably futile. That doesn’t mean that you can’t or shouldn’t have a view of where you want your business to be in 3 years time but the likelihood is that there will be many twists and turns on the road to that point. Better then that you concentrate on the year ahead and then break it down it to manageable chunks of say 3 months. This will help to keep you focused and should ensure that remedial action, if necessary, is taken sooner rather than later.
Looking forward and developing your plan requires the same thinking as looking back. Remember this is a continuous process. Start with the goals and work your way back. Remember that number – YOUR number. Well that will central to your goals. But to make it easier you will probably need to break it down into smaller related goals. Just remember it has to be something you can measure. How else will you know that you have achieved it? It needs to be clear and focused or otherwise it will be difficult to keep your eye on the ball. And while all goals should be challenging it has to be do-able. Otherwise you are just setting yourself and your business up for failure. And of course you need to know the when of it – when will you get there. How else will you know to check to see if you have reached the finish line?
You might, by now, have noticed my struggle to avoid acronyms like SMART, PESTLED and SWOT. It is true. I have. Because they seem to get in the way of people thinking things through logically and step by step. So use them if you want, or don’t. It’s really up to you! The point is you need to plan. And that can be as easy or difficult of a process as you make it. In your head you probably do it to some extent every day. This is just about helping you to put a bit more structure and logic on your thinking without the constraints of a template document. How you write it down or put it together doesn’t matter all that much. Just so long as you have done the thinking, know where you want to go and how you plan on getting there. And so long as you have that in some format that you can review and that will help to keep you focused. And just so long as you use it every day, every week, and every month of the year ahead to help you drive your business forward.