Easy steps to creating a business plan
Creating a brilliant idea for a business that’ll be a surefire success isn’t exactly easy. But it is the fun part.
What isn’t always fun is sitting down to crunch numbers, work out exactly how your stroke of genius is going to turn a profit, and ensure you’ve contemplated every possible contingency.
Here are some key things to consider when sitting down to nut out how you’re going to begin your small business journey.
Plan for your plan
Tenfold Business Coaching managing director Ashley Thomson is the second business coach we’ve spoken to who subscribes to the theory that the content of a business plan isn’t nearly as critical as the process of actually creating it. Thompson says that writing your business plan ensures you’ve thought things through and prepared properly for whatever happens next.
A business plan is a road map of what you want to do.
“For me, a business plan is a bit of a road map on what you want to do. The important part is not necessarily the plan, the important part is the bit that goes into thinking about the plan,” he says. “To actually put together that market analysis you’ve got to go and ask some pretty good questions and do some pretty good research.”
Once you’ve built a recipe for success, stick to it.
One of the worst things you can do is to rewrite your business plan every time the wind changes.
It’s there for a reason, and you need to give the strategies you’ve created time to bear fruit, and only change course when it becomes patently obvious that things aren’t working.
“A plan is good for a short period of time and then market conditions change and things like that, but as long as you stick with the overall structure of the plan, that’s good,” Thomson says.
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Don’t think. Do
It’s all very well to have a business plan purely because someone’s told you it’s a good idea, but how will you ensure you stick to it?
Thomson recommends making your plan action-oriented, so that there’s always a next step requiring your attention.
It’s best to keep you business plan active with clear goals in sight.
“It’s really about those action-oriented, specific tasks, rather than broad statements,” he says.
Stick to action oriented tasks rather than broad statements.
Thomson’s key business plan steps
- Get clarity around your vision. What are you trying to achieve and what’s the big picture goal? Where do you want to be in three years time and where do you want to be in 12 months time?
- Do some projections: Sales, profits, cash flow and market penetration. Then break it down further into specific areas like marketing, human resources, finance and other action items. Thomson says some simple forecasting can save some major headaches further down the track. “A classic example is that a lot businesses that are growing at a very past pace will often run out of capital. Now if they had done a business plan and done a cash flow projection and worked out that they needed to be able to fund their debtors, they would have worked out that when they got to the million-dollar mark or the two million dollar mark, they were going to run out of money.”
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- Do a risk analysis. “It’s very easy when you’re putting these business plans together to get overly enthusiastic about the idea you’re working on,” Thomson says. “A good, thorough risk analysis where you think about, ‘well are people prepared to pay those prices or is this a product or a service that is defensible or am I going to get 14 other businesses that are going to copy me in six months?’”
- Don’t go it alone. Incorporate key people from your business into the planning process, so it’s not just something that’s driven by the owner only. Get input from other key stakeholders. The more input they have into the business plan, the more likely they are to want to drive it and make sure it comes to fruition.
- Review your plan every quarter. While it won’t necessarily need changing, Thompson says it should at least be checked and assessed. Don’t let it be a once off activity that gathers dust on a shelf for the next three years.