There are traditionally two reasons why you would want to write a business plan:
- The first, to satisfy potential investors or future business partners that you have a well thought out proposition
- The second, to create a roadmap to achieve that success.
While the first reason is externally focused, I think that the second reason, the internally focused one, has so much potential to be used to even greater effect.
7 ways to make your business plan work:
- Take stock of your personal goals.
Remember, while you may be writing this plan to persuade others it’s a good idea, fundamentally, it’s for your goals.
For the small Business Owner business goals are often intrinsically linked with personal goals: to create a pension fund; to satisfy ambition; to create independent wealth; to build security for yourself and your family; to have freedom and independence; to feel that you are contributing to society or to a better community. These are just examples. Connecting personal goals with your business goals often re-energises and motivates battle-weary business owners.
- Define and share your guiding principles for decision making with your team.
Often talked about in your business plan as your values, these should be true at every level of the business. For example, if quality is a key value this applies as much to the accuracy of the invoices the Finance team raise as to the delivery of your service to customers.
However, simply framing a set of values will have little or no impact on the business. You need to ensure they live and breath. Use them as part of your recruitment criteria, focus on them in your induction training, draw on them in team meetings, weave them into job descriptions and PDPs (Personal Development Plans). To help decide on yours download our suggested list of values from the website.
- Use feedback – from customers, employees, suppliers and other stakeholders.
The goals and strategies of your business plan effectively describe how you are going to move from Here to There. If your plan only describes the business you are running now there isn’t much point writing one! Understanding what’s working or not now will be a valuable source of insights when it comes to defining the new landscape and the routes to get there.
For example, what do customers value most – what does this tell you about your value proposition – is there scope to charge significantly more by differentiating your services even more clearly from other players? Thinking of employees, how do people rate your business as a place to develop their skills and what impact does this have on staff turnover and recruitment costs? Remember to acknowledge the feedback and share with the stakeholders how you have used it.
- Change your pricing model.
Have you only ever changed your prices incrementally to keep up with cost increases? Would a retainer or membership model work? What if you were to dramatically increase your prices and re-position your products and services as premium offerings? Small businesses can be guilty of falling behind the price curve and writing a new business plan is a chance to challenge complacency and create a more profitable model.
- Team work and communication
One of the most common myths is that writing the business plan is the sole responsibility of the owner. It’s true that setting direction sits fairly in their domain and individual owners may have strong views about how things need to be done. Be wary that you aren’t holding onto these views for the wrong reasons – genuine experience and expertise or ego?
Input from others can come in many forms – feedback, consultation, delegation or critiquing, to name a few. When done well it engages people and motivates and, equally importantly brings new and possibly better ideas than you might have come up with yourself.
Part of the process of business planning is to identify the enablers for success – the resources needed to reach the goals. For ‘enablers’ think people, processes, IT, systems, money, physical space or equipment and, possibly, new mindsets. Each area of the plan – finance, product development, marketing and so on will have their own enablers to support the goals and strategies. However, there will often be common enablers between these areas. For example, a CRM system which captures information on new leads, creates targeted marketing for groups of leads and is used as a portal for logging customer call records will support marketing, sales and customer service, as well as provide management information for decision making.
When business planning is done well it creates a clear picture of the resource decisions to be made across the business, helping you create a prioritised project plan.
- Track progress
A good business plan sets measures of success for all areas of the business. However, many don’t and consequently the link between business plan and everyday operations soon gets lost, feeding the perception that business plans are written and shelved.
Instead, embed the measures of success in regular reporting, share them with employees, review progress in team meetings, include them in induction training. Could you create a scorecard version and use it to take a quick temperature check of the business with your teams – and then take action to keep on track?
Whether your intentions are external or internally focused you are painting a compelling picture of how you are going to take your business from where it is now to its glowing future. The thinking process can be incredibly challenging but equally motivating. It doesn’t, however, have to be done in a darkened room or solely staring at a blank wall and a blank screen. The BP process can be dynamic, involving and a creative process which taps into myriad resources within and outside of your business.
To kick-start your business planning download our Business Improvement Checklist and start identifying the gaps and opportunities that would make your business stronger.
To discuss how to engage your team in building a dynamic business plan email me at email@example.com or call on 07920 031820.-