Writing a business plan is a much talked about vital step in setting up a business and yet, surprisingly, many entrepreneurs skip this phase. The reasons for this are many - the thought of writing a plan can seem too daunting and complex for some, or too time consuming when there are other pressing tasks to undertake. Others don’t want to put their ideas onto paper – to be knocked down by others. Ishreen Bradley of Bizas Coaching looks at how to create the perfect business plan in no time at all.
However, they are missing a vital point - writing a plan not only sets the direction of the business, it helps clarify ideas and thinking and determines if products or services will really work in the market. In a nutshell, a good business plan supports growth and can help entrepreneurs avoid costly mistakes.
Unfortunately, many entrepreneurs only decide to write a plan when they need a loan from the bank, which is the least useful purpose of writing a business plan. The most valuable application of a business plan is to help a business owner set the business direction and its performance goals, which can then be communicated to employees. Just the process of creating the plan encourages the business owner to think about the purpose of the business, particularly in the light of the current operating environment.
It is a popular misconception that writing a business plan is complex. The best plans are short, simple and can be created in a one-page document. There are specific steps that an entrepreneur can take to create a business plan that will support their thinking about the future of the business.
- The first step is for a business owner to consider the legacy its company provides in the world. Why does the business exist? What difference does it make? What will the business be known for? This sets the context for everything the business does.
- Once this context is communicated to employees, customers and suppliers, they will share a vision of the business that goes beyond commercial transactions. The extent to which employees are allowed to challenge and put their own thumbprints on the plan will determine their level of engagement. Involving them and getting their buy-in you, will create an energy that becomes infectious. Once people in the business understand why the business exists and sign up to its future vision, they will be more determined to help it succeed; more passionate about their roles and inspired to take actions to help the business succeed.
- However, growing the business will not happen through context alone. An entrepreneur must establish processes to keep the business in check and on target to deliver its goals. This can be achieved by setting what we call ‘Breakthrough Goals’ for the current year - which if achieved, will give the entrepreneur confidence the business is on track to fulfill its vision.
When it comes to goal setting, there are four kinds of goals that companies tend to adopt.
Business as Usual: this is not really a goal. It is more about continuing the status quo and expecting to produce the same level of results or better.
- Stretch Goals: these goals are ambitious however, an entrepreneur will be fairly confident that the business will accomplish them. To achieve them will require the business to work harder and become more efficient.
- Breakthrough Goals: these goals are beyond stretch goals and the goals that a business should set to achieve growth. A business owner knows deep down they can be attained, but cannot see how yet. They may get butterflies in their stomach imagining these goals being realised and such goals will be challenging.
- Pie in the Sky: Sometimes, people come up with ridiculous goals. These are the kind of goals that even the most trusted colleagues, the accountant or Bank Manager would laugh at and as such are best avoided.
- Once breakthrough goals have been identified, the next step is to identify areas of the business that will deliver the breakthrough goals such as IT, Team, Finance, Admin, Operations and Sales. The entrepreneur then needs to make the right people in the business accountable for these different areas and work with them to set quarterly milestones for their division.
- Finally, all this should be put into a one page graphic that can be stuck on the notice board and used to regularly track progress. A simple plan like this will enable everyone to know where the business is going and importantly, their role in making that happen and how they are progressing against the plan.