When I work with a business owner, one of my first questions is, ‘Do you have an internal business plan – and if not, why not?’ Most people think of a business plan as a document that’s written for an external audience, usually investors or a bank manager, with the aim of attracting investment or a business loan. But it’s just as important to have an internal business plan. An internal plan provides focus and guides business owners to make better decisions. And, when shared with the wider internal team, it helps engage employees and give them an idea of where the business is heading.
While it’s important to have an internal plan when you’re just starting out, it’s also vital you review and revise the plan whenever there’s a significant change in the business, such as a change in strategy. Whatever stage you’re at, here are five critical, often overlooked, questions that must be answered.
- Why are you running the business?
The reasons for running a business are many and varied. For some, it’s the result of an opportunity, such as being made redundant. Others may be passionate about service. Some feel a responsibility to create employment or give back to the community. Whatever the driving force (or forces) behind your business, being clear about your purpose is the best starting point for any internal plan.
- What will the business look like when it’s finished?
‘Finished’ in this sense doesn’t mean over. It means reaching a point where you’ve achieved what you set out to do. Would you like to build the business to a certain point before selling it or handing over to your children, for instance? Many business owners don’t have a clear sense of where they’re going – the business is just an ongoing activity without a defined end goal. By deciding where you ultimately want to take the business, you can make better decisions to get you there.
- What do the people you’re selling to most value (and where else can they get it)?
The marketing section of most business plans tends to focus on tangibles that are relatively easy to pin down, like target market and market size. Focusing on what your customers most value is the best way to ensure you can deliver what they want.
- How will you make your products or service distinctive in the market?
Having pinned down what your customers value, and who else is meeting those needs, you can focus on what sets your offering apart. It could be a genuinely unique product feature that isn’t available elsewhere. Or it could be a highly personalised service. If it isn’t anything in particular, why should customers choose your company over the competition?
- What does your ideal team look like?
A typical business plan will often include a basic overview of the organisational structure. However, I find it’s more helpful to focus on attributes and capabilities rather than structure. You should therefore consider the attributes of your ideal team members, and identify the kinds of people that you really want to attract and develop.
Creating an internal business plan and sharing it with your team is a great way to articulate what you’re trying to achieve. If you would like help with any aspect of business planning or business strategy, please get in touch.