So, the same as most of the solopreneurs, sole traders and small businesses, I get plenty of subscriber emails from coaches, marketing companies, strategists…the list goes on. And some, I like to read, see their insights, and work through my own processes and see if they align.
If they do, I enjoy reaching out and connecting more.
Last week, I received an email from a business coach that claimed that business plans were, and I quote
“Writing a business plan is a complete waste of time, and can even be pretty dangerous for an SME business. Here’s why:
- You can’t write one without either some strategic business understanding or having tested the entrepreneurship journey.
- It’s such a big job that it becomes more of a road block than a guide.
- Last but not least, the world is moving so fast that it’s obsolete before it’s even finished!”
You wouldn’t build a house without a plan, or go on holiday without a rough plan of where to go, where to stay and how much it will cost. Why would you start a business WITHOUT one.
I am going to address each of the 3 points above.
- You can definitely write one without an understanding of business. You just need to be able to HONESTLY answer the questions, set the goals, set the staged targets and keep it relevant.
- Yes, it is a fairly big job, BUT, it is also an IMPORTANT job. It sets out the structure for next few years of your business.
- The world does move fast… a plan provides structure and solidity during times of change, whilst also allowing flexibility in your business when needed.
Those of you who have worked with me or even have seen some of my free webinars will know my very first top tip and, in my opinion, the first thing any business should tackle is the planning.
A business plan is more than a document. It is more than a plan for your business. It is THE most important step in starting and growing a business.
In reality, a business plan is never really finished. Your business plan should be an organic document. It grows when you grow. It changes when you diversify and it reminds you of your goals, your vision and your journey to where you want to be..
In principle, it is not necessarily about the plan, it is the process of creating the plan which is of real importance when growing a business. And it is this you need to understand in order to take your business to the next level.
It does not HAVE to comprehensive, but I do advise that it sets out SMART (specific, Measurable, achievable, realistic, time bound) goals. And have a plan for your sales and marketing. Without these fundamentals, you are shooting in the dark.
Here are some myth-busting facts around business planning.
New year, new plan?
One major myths organisations have about their business plan is that it is there just to tell shareholders, investors and lenders that the company is headed in a good direction and those business owners have everything under control.
People think a plan can be written at the start of the year and, once it has been seen by everyone who needs to see it, it can be filed away, where it will gather dust until the next stakeholder asks for an update.
Sure, it is part of their remit, but, as the name suggests, business plans are there to help you to plan your company future. Giving an opportunity to explore your business’s objectives, strategies and forecasts in detail so that you can achieve growth.
It’s all in your head
Keeping your business plan in your head and not seeing the need to write it down is something I see a lot in small businesses and sole traders.
However, even if you don’t have stakeholders, most businesses eventually get to a point where they need to have a team. Without a written business plan, your team members cannot have any kind of input on the plan. While it might seem to save yourself time and boost your own efficiency, keeping a business plan in your head can be detrimental to the growth and revenue of the overall business.
According to a survey by the Kauffman Centre of Entrepreneurial Leadership, companies with written business plans achieve 50% more sales growth and 12% higher gross profit margins than companies without them.
The reason? Because the written plan gives you, and your team, clarity on where you are headed – which automatically aligns everyone in that direction.
It’s all your fault!
When business owners realise that they have not achieved their growth goals, they often blame themselves. They think that the reason growth has slowed is that their approach is wrong, or that they haven’t been putting in the hours and rolling back the sleeves. They aren’t doing the hard work required to keep the growth up.So they then seem to push themselves harder and run faster to try and change that.
What has actually happened is that they have not created an efficient business plan, or the business plan does not involve the implementation of new systems and techniques to facilitate growth.
If you are at a stalemate with your business, instead of thinking you are the cause, you need to go back to your business plan (or write one!) and ensure that you have a focus on creating the systems that will not only keep your business running but will also help facilitate growth.
Of course, these are not the only myths. There are a lot more out there than the three I’ve mentioned. That’s where getting the guidance of a business consultant can be really helpful – we’ve seen time and again what kind of business plans help take businesses to consistent and sustainable double-digit growth, and which ones just end up sitting on the shelf all year. And I think you’d prefer the former!
If you would like to have a chat about creating a solid business plan, that should be reviewed every 90 – 180 days, pop me an email and we can chat.