Business owners without a business plan: Why you need one & what it needs to cover
Article by Katrina Brennan
We all get busy in the hustle and bustle of business life. But if you want to successfully grow, the key is planning for the future.
Most business owners understand the importance of a business plan but an alarming number fail to successfully implement one.
This is asking for trouble and suggests that it needs to be made a higher priority.
So let’s look again at the importance of a business plan for all businesses – and what you should include in yours.
The importance of a business plan for every business owner
Every business owner needs to address a number of areas in order to run the business effectively.
They apply to all businesses, large or small, start up or established:
- Develop and execute strategy
- Set priorities
- Allocate efforts and resources according to priorities
- Establish tasks, responsibilities, and performance expectations
- Track results and compare them to expectations
- Manage cash flow
- Budget sales and spending
Envisioning goals and then defining strategies you’ll embrace to achieve your objectives is the true essence of strategic planning.
Easy to overlook in a smaller business, strategic thinking identifies the methods you will take to reach your goals.
For example, if you believe you must expand your ecommerce function to achieve increased sales volume, you’ve also identified the method required for your strategy to reach company goals.
By identifying the strategy, you’ve defined the method to employ; the specific steps and components can be saved for your business plan.
Note that, as critical as business planning is to the success of your company, all plans are useless unless followed by action.
An additional side benefit of strategic planning is the natural action plan that stems from identifying your preferred strategy.
While strategic planning involves your vision, mission and dreams, it also further defines the rudiments of your action plan to achieve the results you want.
What your business plan should cover
Take the time out in your business to reflect on the following key areas:
- Where is your business NOW?
- Describe your current situation and the issues you face.
- Where would you like to be in the future with the issues you identified in NOW?
- This may include elements of your vision and business statement.
- It can also include your sustainable competitive advantage, key performance measures and objectives.
- How will these strategies bridge the gap between the NOW and the WHERE?
- How will the specific action plans be developed from the strategies?
- What is the required timing and who is responsible for the carrying out the action plans?
How detailed does your business plan need to be?
A business plan can be one page or 50 pages. The important thing is having a consistent framework.
There are several advantages of developing a simple one-page business plan:
- It takes only minutes to do and can be updated just as quickly.
- It acts as a simple control document for your business improvement process, easily understood by all stakeholders, your employees, your bank, your strategic partners and you.
- If a partner (e.g., a bank) needs more detail, such as a market analysis or financial projections, these can easily be added as attachments to your one-page business plan.
Note that it is essential to date the plan and update it on at least a bimonthly basis. It’s usually only the action plans that need changing in the short term.
If you need assistance in developing a business plan for your business, feel free to get in touch and we’ll provide a helping hand.