Many business owners and managers have a number of good intentions and new ideas for their business that they mull over. However, unfortunately many of these good ideas never see the light of day.
It doesn’t take long for business owners to get caught up in the day to day issues and priorities concerned with running a business.
It means that all those great ideas, developed while the owner had the time and leisure to think about them are likely to be forgotten or put aside.
This is a great pity, particularly as bringing these thoughts together in a simple plan can add significant value to the business.
Any ideas should be put in writing now as part of the overall business plan before they are forgotten and before the pressures of business take over.
It’s not too late for business owners to take advantage of the insights they developed away from the business by bringing it together in a plan that can evolve and develop further.
It’s a very good idea to put such a plan in writing, for a number of reasons. These include:
- making it easier to share the plan with employees;
- allowing it to be given to financiers and stakeholders;
- helping monitor success (or failure); and
- ensuring there is record for future reference.
Five main tips for developing a useful business plan are:
- Keep it simple
Business plans can be short or long term; and include personal, marketing, or any other more focused plans.
Having some form of longer term business plan (five to ten years), no matter how brief, that deals with where the business is going and the broad strategies of how it is going to get there.
This acts as a guide for the focus of the short term plans, which then detail the objectives for that year that are in line with the long term objectives.
The plans do not need to be long-winded, and don’t need a great deal of background to be effective.
- Follow a format
Every plan should follow the same basic format, covering:
Now - looking at where the business is now, and the issues that are facing it.
Where - outlining where the business wants to go, and its vision, objectives and competitive advantage.
How - the strategies and actions to get there.
This can be reduced to as little as one page or more often, one to two pages for each of NOW, WHERE and HOW.
- Measurable objectives
It is important that business objectives are measured regularly to see if they have been met.
The ultimate measurement of business objectives is usually a financial measurement - the profit or loss earned or balance sheet balances achieved.
But shorter term objectives should be measured with non financial measurements.
For example, a plan to increase sales (an objective) may include an increase in the number of visits by new sales representatives. The monitoring of the number of these visits, a non-financial measure, is a much better and more focused measure than simply recording an increase in profit.
Similarly, increased customer satisfaction requires a non-financial measurement such as a customer survey.
- Action plans
There must be a plan of actions to achieve the objectives, showing who is to undertake the action and the time frame.
Prioritise actions as it will not be possible to undertake everything in a short time frame. Additionally, the time frame must take account of the fact that the actions are usually in addition to other daily tasks and therefore will take more time to complete.
- Someone to keep you honest!
Too often, a commitment to the planning process diminishes due to the pressure of dealing with day to day operating issues, and the process will ultimately cease or actions only partly achieved.
A formal process should be implemented to ensure all actions are fully completed, and objectives met.
An independent party who is privy to the business plan is ideal, or alternatively use a formal report back process to others in the organisation.
A business without such a plan is inevitably going to miss out on opportunities and fail to capitalise on its strengths.