Back in my newspaper management days I loathed the annual business plan process, largely because it usually meant I’d plan and ask for things that I’d never get the go-ahead from senior management to do, so it was frustrating. Now, owning and operating my own business, I’m grateful for the business planning experience I’ve had and would likely be rocking in the foetal position in the corner if I didn’t have a chance to get my ideas and plans out of my head and onto paper, and to enjoy that sense of satisfaction when you can tick off the achievements and progress. It’s particularly refreshing to tick off the to-do list when you have one of those days where you wonder why you’re in business for yourself and think you’re not making progress.
Not having a business plan is like going shopping without a shopping list – you’ll end up pursuing things you don’t need to be pursuing, or you will forget to do things that you need to do.
Many people I speak to who don’t have a business plan say it’s because it’s in their head. There lies a significant problem. If your plan is in your head
- It is taking up space and energy in your brain that could be used for getting something else done;
- It is likely to be forgotten;
- Your staff or other stakeholders don’t know what you’re planning or thinking;
- When you’re faced with a crisis or a need to act on your plan you often aren’t in a position to be thinking clearly; and
- You will have no chance of convincing a bank, potential buyer or investor of what your plan is unless it’s documented.
A business plan can be basic or complicated, but at the very least you should have a strategic plan that provides an overview of your business, analyses the strengths, weaknesses, opportunities and threats and documents strategies for at least the next five years, including clearly defined deadlines.
Below are some tips on how to put together a basic strategic plan:
Identify your mission – what is your business about?
At the heart of any strategic plan is your mission. This will outline succinctly and clearly what your business is supposed to be doing, to whom and how. For CJ’s Business Solutions it is “to provide cost-effective and practical tailor-made solutions for small business”. Don’t undervalue the mission as it’s what will keep you on track when an opportunity or a threat arises that may threaten to drag your attention from your core business. We’re often critical of government bodies, particularly councils, for losing sight of their core mission when making decisions, particularly when it comes to money, so a clear mission will help ensure you don’t fall into the same trap.
What’s your current position?
Take a moment to reflect on your current business position, including a brief overview of its history. This will be a good point to refer back to when you review your plan in the future. Identify your current economic position, competitors, staffing levels, assets, product or service offering.
SWOT Analysis – strengths, weaknesses, opportunities, threats
This is probably one of the most important parts of the plan and can be quite eye-opening to reflect on. I encourage clients to also think about getting others involved. Even if you’re a sole trader you can get feedback from friends, family or even those within your business circles about what they might perceive as being the strengths, weaknesses, opportunities and threats for your business. Sometimes we’re just too close to the business on a day to day basis to see them clearly. Your SWOT analysis will provide the framework for setting your goals and your strategy. If you have staff, involve them in this process as they can often bring a different perspective, and they will feel like they’re a part of the future of the business.
Goal setting & strategies
Take a look at the SWOT analysis and identify some of the issues you believe need addressing and create a goal from it. Again, involve your staff if you have them, or reach out to support networks for advice and assistance. Having staff invested in the business’s goals and strategies will make a world of difference in your ability to be able to deliver them.
Ideally the goal would have a deadline associated with it, so you can refer back to it and tick it off when done, because everyone knows the great feeling we get when something can be crossed off the to-do list and marked down as an achievement. The strategy is essentially the steps you’ll need to take to achieve your goal. Each step MUST have a deadline, otherwise you’ll find your goal will not be achieved.
If you’re not sure how to get started, here are a couple of examples:
For a sole operator the following could be a scenario:
Threat: If something happened to you (illness or worse) the business would not be able to operate.
Goal: To enable the business to continue to operate if you’re ill.
Strategy (add deadline dates to these):
- Seek out collaboration with another similar business to provide a backup service if needed.
- Write down what it is you do on a day-to-day basis to serve as your operations manual.
- Ensure someone you trust has access to where your passwords might be stored to access any online services.
Another example might be:
Opportunity: If X staff member received training in Y we could offer Z service.
Goal: To offer Z service by the end of December.
Strategy (add deadline dates to these):
- Work out cost/benefit analysis of introducing Z.
- Investigate what training is needed.
- Speak with X about undertaking the training.
- Seek out potential government subsidies for training.
- Organise paperwork associated with training.
- Enrol X in training.
- Completion of training.
- Introduction of Z service.
- Promotion of Z service.
Review and update
It’s essential that you review and update your business plan regularly. I have my business plan in a Google document, so I can take a moment to review it whenever and wherever I want. A great place I find is while the hair dye is taking hold every six weeks at the hairdresser. Other opportunities might be when you’re finalising end of month accounts, preparing your BAS or, if you take stock of your accounts weekly, then a quick check of your plan may be also included.
Diarise your business plan strategy and goal deadlines to keep you honest. Remember: there’s no point committing your plans to writing if you don’t review them and if you never actually undertake the strategy you plan for.
Today’s business solution action list:
If you already have a business plan
- Review it
- Diarise your strategy and goal dates.
If you don’t have a plan:
- Make a time in your diary to prepare your plan (it could be over several sessions).
- Identify who you’re going to involve in your plan’s preparation
- Prepare your plan
- Diarise your strategy and goal dates
*Written by Carolyn Jeffrey, the principal of CJ’s Business Solutions. For more help with any of the matters covered in this blog visit www.cjsbusinesssolutions.com.au or call 0435 432 203.