I believe however large or small a business is, even if it's just you, you should have a plan that helps guide your business forward. Now don't get me wrong, this doesn't have to be a 30-40 page document, but something that captures the key objectives that you want to achieve for the next 12 months; so it could be on 1-2 sheets of A4. The most important thing is that it should be a dynamic document. By that I mean that it shouldn't just be created and left to gather dust, it should be reviewed on a regular basis to ensure that your business is moving ahead in the way that you want it to and you are gauging your performance as you go.
So, I don't intend to go into what should be in a business plan (that could be covered in a future post) but I thought it might be worthwhile to explore 10 reasons why you should consider having a plan in place.
No.1 Clear Vision & Direction
Know where you are heading. Why not have a vision and mission statement for your business? If nothing else it is something you can share with prospects, customers, staff and other relevant parties, so that they are aligned with your business.
No.2 Identified Goals & Objectives
In order to steer your business in the right direction you need some define targets that you want to achieve; which can be monitored on an ongoing basis in order to measure your performance.
No.3 Defined Action Steps For Success
It is not often that actions are included in a traditional business plan, but this is key to move your business forward. The vision and objectives set for your business should define the actions that you take. Break them down into “now” actions, the ones that need to done immediately, and “next” actions, those that follow on logically from the steps before.
No.4 Helps You Focus On What Is Important
One of the most powerful tools that is underused by small business owners is the power to say “no”! So much time can be saved when you can make a more informed decision about your business and only agree to those things that are important to where your business is going; hence keeping you focused.
No.5 Gives You Clarity & Purpose
Building on the above point, having a written plan provides you with a much better overview and understanding of what you want to achieve on your journey to success. Left in your head, this may not be so apparent.
No.6 Helps You Understand Your Market & Competition
This maybe just a simple SWOT analysis for your business, looking at and understanding your market and who you are up against – ideally identifying the key benefits that your business has over your rivals and why someone should buy from you.
No.7 Provides Focus On Finance
You've probably heard it said before that “cash is king” in any business and that is very true. Knowing your incoming and outgoing money is essential. A business plan can capture some numbers on paper so you can project your sales, your costs and your profit.
No.8 Holds You To Account
If you have a document that outlines your business objectives and you are measuring your performance, then this is something that you can use as a reference or a guide for you so that you can be sure that you are making the right choices for your business to be successful.
No.9 You Can Share It With Others
This can certainly help with the previous point. If your plans are made public in some way and you share your progress this can help hold you to account. But also it helps other people understand your business and what you are aspiring to.
No.10 7/10 Failed Business Had No Written Plan
This last reason may seem a bit drastic but it was a statistic shared to me by an insolvency practitioner who had (unfortunately) worked with 100s of small business owners who didn't make it and it seems a haunting statistic that could suggest why many businesses fail.
Even if you don't agree or see the point of some of these reasons, hopefully some of them will have left enough of an impression such that if you didn't have a business plan before reading to this, that you will consider capturing the intentions for your business; even if it is only a list of the 5 key things that you want to achieve over the next 12 months.
Good luck with your future, continued success.