“If you fail to plan, you plan to fail.” It’s an old maxim, but it bears repeating. In fact, the whole point of modern planning is to go through the repeating cycle of planning, analysis, reforecasting and proactive action as frequently as necessary to ensure agile execution and stay ahead of dynamic business conditions.

Many small businesses owners plan their holidays with more effort than they plan their business! They don’t have a plan and they simply “wing it”.  They are continually responding to opportunities or obstacles rather than having a clear, written and focused strategy. A good plan involves far more than simply getting the numbers right.

It takes considerable time and effort to develop a good strategic business plan but it’s worth it.  As General Eisenhower said, “Plans are nothing.  Planning is everything!”  It’s the process of questioning and discussing possibilities, strengths, weaknesses, and opportunities that insight and vision evolves.

Why is a business plan important?

A business plan is a very important strategic tool for business owners and entrepreneurs. A good business plan not only helps entrepreneurs focus on the specific steps necessary for them to make business ideas succeed, but it also helps them to achieve short-term and long-term objectives.

Broadly, a business plan provides:

• A description of where you are now
• A clear description of where you want to be in a set timeframe
• An assessment of the gap
• An outline of how you intend closing the gap
• A description of the factors supporting your progress
• A description of the factors that will hinder your progress

In the process of doing your plan, you’ll also set goals and create an action plan, identify appropriate marketing activities and identify resources you need to meet your goals.

Wayne’s role in helping with your Business Plan is to work alongside you and, using a proven formula with prepared checklists and questions to ensure all aspects are covered.  Because Wayne is objective in the process, the discussions will bring clarity, structure and focus to your plan.

The importance of planning cannot be overemphasised.  It is the best way to work “on” your business instead of simply being hectic working “in” your business.  If you fail to plan you’ll probably relate to the old adage, “Having lost sight of our objectives, we redoubled our efforts!”

1. You’ll get a clear picture of the whole business.  Strategic Business planning done right connects the dots in your business, so you get a better picture of the whole business. Your company culture is a BIG driver of your strategy – does your plan reflect this?  Strategy is supposed to relate to tactics with strategic alignment. Does that show up in your plan? Do your sales connect to your sales and marketing expenses? Are your products or services right for your target market? Are you covering costs including long-term fixed costs, product development, and working capital needs as well? Take a step back and look at the bigger picture.
2. You can develop a clear strategic focus. You can’t be everything to everyone.  As Abraham Lincoln said, “You can only please some of the people some of the time!”  No matter the size, all businesses need to focus on their special identities.  For instance, do you want to differentiate yourself by having the best product, the best price or the best service? Are you crystal clear on your target markets, and their products or services tailored to match?
3. You can set clear priorities. You can’t do everything. Business planning helps you keep track of the right things, and the most important things. Allocate your time, effort, and resources strategically.
4. You can manage change more effectively. With good planning, you can regularly review assumptions, track progress, and catch new developments so you can adjust. Plan vs. actual analysis is a dashboard, and adjusting the plan is steering.
5. Develop accountability. Good planning process sets expectations and tracks results. It’s a tool for regular review of what’s expected and what happened. Good work shows up. Disappointments show up too. A well-run monthly plan review with plan vs. actual included becomes an impromptu review of tasks and accomplishments.
6. Manage cash flow. Good business planning connects the dots in cash flow so there’s few surprises. Sometimes just watching profits is enough. But when sales on account, physical products, purchasing assets, or repaying debts are involved, cash flow takes planning and management. Profitable businesses suffer when slow-paying clients or too much inventory constipate cash flow. A plan helps you see the problem and adjust to it.
7. Strategic alignment. How well does your day-to-day work fit with your main business tactics? Do those tactics match your strategy? If so, you have strategic alignment. If not, the business planning will bring up the hidden mismatches. For example, if you run a gourmet restaurant that has a drive-through window, you’re out of alignment.
8. You can set clear milestones. Good strategic planning sets milestones in various areas of the business that you can work towards. These are key goals you want to achieve, like reaching a defined sales level, hiring that sales manager, or opening the new location. We’re human. We work better when we have visible goals we can work towards.
9. Develop clear metrics. Put your performance indicators and numbers to track into a business plan where you can see them monthly in the plan review meeting. Figure out the numbers that matter. Sales and expenses usually do, but there are also calls, trips, seminars, web traffic, conversion rates, returns, and so forth. Use your business planning to define and track the key metrics.
10. Set realistic regular reminders to keep on track. We all want to do everything for our customers, but sometimes we need to push back to maintain quality and strategic focus. It’s hard, during the heat of the everyday routine, to remember the priorities and focus. The business planning process becomes a regular reminder.