A number of business owners we know have been running their companies for years, but have never written a business plan. Not as uncommon as you may think – we just don’t do it, business just happens, I’m too busy, and sole traders in the main question, ‘who’s it for?’
Yet, a business plan is so much more than a document you share with the bank manager to secure a start-up loan. A good business plan provides a statement of intent for you, the business owner, and, well communicated, it helps guide those around you on the company’s objectives and strategic priorities. Here are nine reasons why we think planning should never be overlooked:
- It paints a bigger picture. When running a business, it’s easy to focus only on the short term and constantly be in reactive or delivery mode. A business plan provides a longer-term perspective that you can keep returning to, reminding you of where you’re going and what you’re trying to achieve.
- It drives you to action. Business planning sets out key activities for the future. Without a plan, there’s a risk that these activities will never get started, let alone finished. Additionally, it provides the basis for setting goals and objectives for your team and ensuring the sum of their efforts takes the business where you want it to be.
- It’ll serve as a valuable reference point in future. A business plan should be something you reflect back on regularly to compare actual performance against objectives and see whether you’re on track.
- It creates certainty and common goals. You and your team (including a business adviser, if you’re working with one), need common goals to work towards, and that’s exactly what a business plan delivers. One of our clients creates an annual infographic that sets out key elements of their business plan for staff, without getting bogged down in details.
- It’s not a blood oath. Business planning shouldn’t constrain you or create inflexibility. If exciting opportunities arise that weren’t part of the business plan, you can still flex and take advantage of those. This year because of the pandemic one of our clients has torn up their business plan and set off in a new, exciting direction.
- It’s a statement of intent for your shareholders. If you have shareholders, the business plan effectively acts as a statement on what you’re all expecting from the business. This helps create buy-in on future activities.
- It helps attract investment. A business plan is essential if you’re looking for new investors, because it sets out what they can expect, and how they’ll be rewarded for their contribution. Or if you want a loan your business plan will form a key part of your application as it has for one of our clients who secured a CBIL (coronavirus business interruption loan).
- It’ll help you recruit the best talent. When recruiting a management team, you need to be able to ‘sell’ the business and where you’re taking it. Business planning provides you with the clarity and the headlines to attract a top team.
- The planning process encourages creativity. Of course, the business plan itself is important, but so are the thought processes involved in putting it together. Business planning is a great way to challenge yourself, and it can be a vital source of creative ideas.
If you’ve never created a business plan or have fallen out of the habit of doing so, it’s not too late to start. Even a one-page plan can provide much-needed direction and clarity on where your business is going. And if you have a business plan it should be revisited regularly to check it’s still fit for purpose. After all, businesses evolve and goals change.
If you’d like some help with business planning, talk to Henchards. We’ll facilitate the process, help you clarify challenges, identify opportunities, determine your goals and support you as you work towards and beyond them.