We come across a lot of businesses and the vast majority don’t have a business plan. This is simply a document which summarises your business and critically examines the various components – finances, markets, customers, products, processes, etc.. Many business owners have some kind of plan or idea in their heads about how they want their business to develop, but the written plan ties the various facets together, firstly to examine whether they will actually work, and secondly to communicate the plan to other organisations such as partners, banks, etc..
It also helps identify areas of risk, such as relying on one or two major customers for work, or even main supplier of goods, or times when cash flow is strained which may require additional funding, such as an overdraft.
If you consider the next five years, the plan should hopefully answer the fundamental questions for the business:
- Where are we now
- Where do we want to be
- How are we going to get there
This is a more balanced approach rather than relying on luck or simply ‘more sales’. As any salesperson will know, anyone can increase sales; the trick is to increase sales which provide a profit that covers overheads and makes a positive contribution to the business.
Business plans tend to be prepared because someone like a bank or grant agency has asked for one, but they should be a matter of course. A lot of focus tends to be on business plans for start ups, and they are certainly important for this stage of business, but they are not one off documents which should only be prepared at the start. A business plan can help flesh out the implications of growth, new products, or additional employees. Remember established businesses can also struggle at times too.
So the final point is: if you don’t have a business plan, perhaps it would be a good idea to do one. You can find more information here.
Agree – We need to keep marketing the benefits of having one!
It’s staggering how many entrepreneurs run their business without a business plan and a marketing plan – the two go hand in hand. Yet the same entrepreneurs wouldn’t dream of undertaking a car journey without their sat nav on.
To put it quite simply businesses who fail to plan, plan to fail!
It’s little wonder then so many SMEs struggle… Yet for those entrepreneurs across Yorkshire and the rest of the UK who have a flexible business and a marketing plan (nothing has to be cast in stone! It’s there to be reviewed), it is easier to identify new opportunities, focus resources where the best returns are as well as exceeding clients’ expectations and communicating with them in really engaging way!