Business Planning is Key to Growth
No matter how large a business is, things might not always go its way and it might not be able to handle the unforeseen contingencies that strike the business. The temptation is to think that once the appropriate business funding has been secured, all the growth objectives would be achieved. Business planning is essential for every business irrespective of its size or financial resources.
The business plan is a living document that should be continuously reviewed in light of the business environment and actual performance. This could be as minute as a notebook page but the content should be able to accelerate your business till further notice.
Not as easy at it appears but it should be a result of solid research and financial forecasting. Businesses question whether to make plans short-term or forward-looking but ideally, business management plans are often based on one-to-three year projections. However, all good plans set out key goals clearly labelling how and when they will be achieved.
On the other hand, bad planning could ultimately result in business frustration or at the very least, prevent your business from operating at its full capacity. This plan however, provides a vital paradigm against which you can rate your performance and restricts you from making bad decisions.
This could take several forms but has a unique end result which is to obtain market information, segmentation and trends. At the end of the day, you should be able to work out whether there is a niche for your business and be able to exploit the benefits of competition.
Government statistics could be found on the Office of National Statistics (ONS) website or at your local library, or, for more specific research; you may have to pay for a report from a company such as Experian. You could also do your own research, either by speaking to friends and family or conducting street surveys.
After conducting research, challenge yourself to answer the following questions. Do you know your target market? your potential customers? Market demands? And how will customers find you?
Develop and test your idea
Differing businesses have varying goals and ideas. A business with greater turnover might have greater ambitions and set out to achieve its goals in no time. Your goals are most likely to be based on the state of your financial statements. External factors, such as the economic climate, also have a bearing on business-development plans, so bear these in mind when considering your goals and strategies.
Each time you affix an idea, again, challenge yourself with the following questions; what’s the source of finance? Do I face any competition and if so how good are they? How do I stand out? The more specific you question yourself; the more likely you will be able to influence substantial investors when it comes to business finance.
Write a business plan
A Business Plan should be brief and accurate and will help you focus on your proposed business venture. Typical business plans are a summary of your operations (business structure), market research, promotion plans, management and risks, business finance requirements and most importantly cash flow forecasts.
The temptation for most businesses is to save the scheme among top management. They are a tool for decision making and need to be set out in black and white whereby anyone (probably you) must also assume responsibility for their implementation and the progress closely monitored.
Business plans, in effect, play a vital role in your business strategy and it principally has to be up to date in order to secure long or short term funding. This funding could be internal or external-bank loans or venture capital, depending on your target set.
It might be a well-worn slogan, but it ideally applies – planning without action is futile, while action without planning is fatal.
Can you cope without a business plan? The answer to this is VERY RARELY. 9 (if not all) in 10 successful businesses have well outlined business plans.