Truth is, it doesn’t.
Still, it seems to be the cause of sleepless nights and sweaty palms. If you’re nodding your head right now, we may have a solution…
There’s plenty of evidence showing a large proportion of new businesses fail sometime within the first one to three years after starting up. All too often that’s because of a lack of any real business planning effort.
Research shows that even established businesses – not just start-ups – benefit from a documented business plan. Business that have one, and refer to it on a regular basis, outperform those that don’t by upwards of 40%.
So, what’s the best way to roll up your sleeves and tackle the task of developing a meaningful business plan?
We’ll assume that you’ve already determined your ‘purpose’ – the reason you started the business in the first place – and have a ‘vision’ on what the business looks like in the future. Your purpose and vision are essential anchors for your business plan. Without them, it’s a bit like drawing a map from a known starting point but to nowhere in particular. Kind of pointless.
To begin your business planning adventure, we recommend you step back and analyse your current situation, specifically looking at the classic “balanced scorecard”:
Customer engagement, acquisition and retention;
Team engagement, and;
The most thorough way to do this is with a detailed and structured diagnostic process.
Understanding where you’re currently at will reveal the key areas that need to be addressed in your initial planning. The great news is that with those focus areas in mind, the actual business plan itself should realistically be only one or two pages long. The balanced scorecard headings will act as your guide.
Albert Einstein had a great saying that goes something along the lines that “any fool can make a simple thing look complex, but it takes a genius to make a complex thing look simple!”
As well as simplifying the process, using the balanced scorecard should stop you from focusing on your area of expertise and ignoring the other important components that make up a great business plan. For example, you might fancy yourself as a marketer and just focus on the ‘customer quadrant’. Ignoring other areas that need attention - operations, financials and team engagement - will probably result in key interdependencies being overlooked. And that will almost definitely increase your risk of being part of the failed business statistics.
To help you along the way here are some specific businesses planning tips that work:
Strategy drives structure. Determine what your organisational structure should be based on what is required to deliver your strategy and service. Not the other way around.
Fit the technology around the business – don’t become entranced by the “latest shiny thing” which can end up seeing you try to fit the business around the technology.
Look to become ‘effective’ before you build ‘efficiencies’. Having the best processes and technology in place is no good to you without a steady stream of the right clients paying the right price for the right products and services.
Involve your staff in the business plan where possible. Employees who feel like they’re a part of the vision, value proposition and strategy are more likely to be engaged and offer discretionary effort.
Ensure you have a list of priorities that are time- bound. For each of those priorities it’s also best to assign single point accountability.
A good business plan will include or sit alongside a succession plan. Key people leave businesses all the time (for all sorts of reasons) and that can have an enormous impact on your business plan. Make sure you address that possibility for all key positions – including your own.
Use it or lose it. Since you’re going to the effort of creating a plan, you really ought to keep it “alive”. Refer to it regularly basis and modify it to take account of changing circumstances if necessary.
Following these steps and working through the process logically will reduce the angst most people seem to feel when it comes to business planning. Like we said…it doesn’t need to be difficult!
Finally, it's often a good idea to engage an external expert to help facilitate the development of your business plan. It can help keep the process objective and really challenge you to be open to all possibilities. Here at BusinessBlades we have the tools and expertise you'll need. So give us a call. We'd love to hear from you.
Why not subscribe?
Click to send us your details so you'll never miss a BusinessBlades blog post.