Business planning – your future direction

The business plan is often the most talked about and least used tool your business has created, if indeed, you have one at all. If your business is not what it should be and not performing in the financial and operational manner that you want or expected, then there is a high chance that your business either does not have a business plan or you wrote something you called a plan and it is at the bottom of the filing cabinet or gathering dust somewhere in your office.

You may think, harsh words from someone sitting behind the keyboard and casting a sweeping judgment? If these observations ring true of your business then here are some guidelines and pointers to not only writing your plan, but some tips on how to keep it relevant.

Having a business plan is quite imperative to the good health and even survival of your business. Operating a business without goals and a focus on the path the business needs to take means it is bound to fail in today’s
business world.

Should every business have one?

A business plan is a document that contains a significantly detailed profile of your company for the purposes of focusing all key stakeholders on the business direction and desired outcomes.

Certainly, every business should have a plan, no matter how small or large that business is. You would expect larger businesses to be more sectional or have a number of departments and a chain of command that requires certain results and outcomes. The main deficiency is larger businesses often don’t have enough involvement in developing and implementing the plan and because of a lack of consultation and input from the staff, they do not achieve the very necessary acceptance or “buy in” from them. If the key staff members are not involved, then it is not their plan for the future of the business, but something that is hoist upon them.

The main failing from small business comes from not using the business plan as an evolving document. The business plan needs to be viewed as the blueprint for the business and reviewed and updated on a regular basis, preferably every three months.
This document can be a number of things for your business – it can be a small business owner’s wishlist
that in turn determines the operating capital required to expand the current business, make an acquisition of an additional complimentary business or even to start a new business. The business plan can be presented to bankers or potential investors, but its main purpose is as a blueprint for senior management.

So the business plan can and should play many important different roles.

• It can provide direction
• It can increase operational productivity
• It can get your business money
• It can prevent risk
• It can help your business succeed rather than just survive
• It can provide results

The creation of the business plan should involve all key stakeholders in the business and the management. In particular, their input, ideas and general contribution should be sought so that the overall plan becomes the vision for the future of the business. Their enthusiasm for the concept and follow through will be many times greater if they are consulted and involved.

The business plan should be an ongoing management tool to be used to help an organisation do a better job, to have all parties working towards the same goals. It is a tool that determines what a business is, what it does and why it does it, with a focus on the future. A business must be responsive to a dynamic changing environment and highlights the importance of making decisions that
will ensure the business’s ability to successfully respond to changes.

An outcome from the process that will become clearer as you progress through the structure of your business plan would be the clearer outline and focus. This would include the effects of government and industry regulation to achieve best practice, to be technologically further ahead than your competition and develop better ways of servicing new and existing customers. This requires the development of a competitive strategy to achieve the mission through these areas. It will need to create an organisational structure which will develop people as resources to carry out its competitive strategy.

Where do we begin with such a big task? Do I really need to do all this if my business consists of two owners and three employees? The answer is still “yes” but you will find it is a much easier task as you are not dissecting different departments, realigning their activity and then making sure that all the different sections funnel through to the desired result.

The best place to start is to have a critical look at what you have – this is often the hardest thing for a small business owner to do. Look at what you have created and be impartial about what you have and what the business has achieved so far. It is a great benefit to have someone to “chair” your discussions who is not an employee and can help you draw out your strengths and weaknesses in an honest and constructive way.

We should go through the steps and what they mean in terms of giving a clearer definition to the entire process. Understand the course of action that you need to complete to make sure you have a good understanding of where you stand and the direction you want to take.