22nd September, 2015
A useful business plan should not be a huge folder that sits on team members’ desks, gathering dust. Ideally, it should be a one-page summary visible to everyone and reviewed weekly, or at least monthly. A master copy with responsibility assignments should be in a common room, like a boardroom or staff meeting area. You and your team can see how far you’ve come and what goals you are accomplishing. Success breeds success — or weeds out failures.
Read this next: How to write a business plan in 12 steps (2023 edition)
Brainstorming is fine, but without forethought it can often be useless. Before holding a planning meeting, instruct each member of your team to focus as much critical thought on a specific business process as possible.
Have them talk to those already in business to identify roadblocks, examine processes, and learn all they can from trade associations and competitors’ strengths.
Ask them to identify your business’s major strengths, weaknesses, opportunities and threats (SWOT) in advance. Of course, more can be added during the meeting, but advanced planning can keep everyone on task.
Make projections about future market conditions for your sector based on realistic market factors. Even big companies can get this wrong. I had a client working for a large international company during the mining boom, and the Aussie arm carried the whole company through some bad times. Once the boom ended, Aussie sales dropped 50 percent, and it was as if the others had come to rely totally on that one sector’s outperformance. Rather than plan for the cycle to end, they had rested on their laurels.
The more you know about each sector of your business, the more accurately you can make intelligent projections of sales and potential profits for the first few years and market cycles.
Prepare your budget with a buffer for contingencies. Accept the fact that starting or improving your business — or new projects, expansions or retractions — will always require more funding that you’ve anticipated. Have enough working capital on hand, and secure back-up resources just in case the new business does not prosper as you had anticipated. Know the breakeven point for the business and what it takes to meet it.
After you have spent time and energy on research and strategy, put your plan on paper. It should answer the following questions:
Remember, your plan can and should change. Implement, support, monitor, review, adapt and grow the business plan organically as a living document rather than a one-off team-building, feel-good event.
Once your plan is in place, you must always monitor the market, your competition, new competition and new processes. Look for weaknesses and opportunities so you can find new customers.
I was always hesitant to take on professional help in business planning, but after the third folder sat gathering dust, we took on a business coach to keep us on track — and it’s working.
In addition to hiring a professional coach, we put effort into understanding the reports our MYOB accounting software could provide so we were up to date and not relying on figures that were months out of date. Having current information helped us realise the impact our plans and activities were making. We can now adjust quickly to keep the business on track according to our plan.