Successful business’s have in place robust plans for driving the business forward to achieve the medium and long term business goals (plans for growth).
They regularly review it’s content and context to ensure it continues to meet its needs. It doesn’t matter on the size of the business. Turnover or number of employee’s. Growing and successful organisations have planning activity at the heart of their strategy.
Growth will only come from knowing the key drivers in the business
- What works
- Which products / services deliver the highest profits
- Allocation and needs of resources
The above issues should be included in the plan and how these will match the growth of the business and how they map across the organisation.
The Importance of Continuous Business Planning
Investors and banks will want to see a business plan before making decisions on funding, but the plan should be more than that. It should cover all aspects of the business and define how growth will be managed and measured. Above all it should define the business objectives, how these will achieved and the timescales.
Resources should be addressed showing how these will be allocated, responsibilities and success measured. The plan can help you attract new funds or that you can use as a strategy document and most of all it should be a living and breathing document that is reviewed monthly and constantly used as a yard stick for measuring the success of your business objectives. A business plan will also ensure that you meet certain key targets and manage business priorities.
The review process will help in communication with banks and investors, and will certainly be a key document with potential buyers should the aspiration be to sell the business. Defining your business’s purpose in your plan keeps you focused, inspires your employees, attracts customers and shows commitment to suppliers.
What Your Plans for Growth Should Include
It doesn’t really matter on the structure of your plan but it should detail the following key five stages to give every reader of your document an insight into your business:
- A summary of what your business does
- How it has developed
- Where you want it to go
- Your strategy for improving your existing sales and processes to achieve the growth you desire
- Timescales for the plan, and for growth
The plan needs to include:
- Marketing aims and objectives
- Operational information
- Financial information
- A summary of the business objectives, including targets and dates
- If the business is owner – managed you may wish to include an exit plan
- Your aims and objectives for each area of the business
- Financial records from the last three years
- Details about trading to date
- Skills and qualifications of the management involved in your business
- Details on the products / services produced, along with some competitor / market information
It sounds like a huge task but the value it brings to the business and the directors is immeasurable, detailing the successes of the business, the aspirations and how these will be achieved is an exciting journey. Further to this for external stakeholders, banks, investors, directors etc. it demonstrates a deep understanding of all the dynamics within the organisation.
Measuring The Success of The Plan
A successful business plan should incorporate a set of targets and objectives, while the overall plan may set strategic goals, these are unlikely to be achieved unless you use SMART objectives or targets, i.e. Specific, Measurable, Achievable, Realistic and Timely, in short all aspects of the plan should be able to be held against a set of key performance indicators, KPI’s.
Detailing how the business is performing with KPI’s helps everyone within the business understand what they need to achieve and when they need to achieve it by and details to external stakeholders, investors, banks, etc., an in depth knowledge of the dynamics of the business.
Timescales For Review
As soon as the plan has been written and finalised it needs to be implemented and regular reviews to performance carried out. The review should include:
- Assessment of your progress to date
- Performance to the plan
- Detail any drift from the desired roadmap
- Actions for staying on course
This is called the Business Plan Cycle and should be a continuous process detailing a rolling three year period as a minimum, with the plan being regularly updated and monitored. The timescales for review are very much driven by each individual company and the markets worked in, for example, retail companies would potentially have a much shorter review timescale than companies working in medical research. But as an absolute minimum an annual plan – broken down into four quarterly operating plans – is sufficient.
The first writing of a companies business plan can be a lengthy process. But should be achievable, even calling on the help of external support. But very quickly the value to the directors, managers, staff and external stakeholders, will become evident and the document the driving force of the organisation. Without a business plan, there is no direct for the business and no clear plans for growth.
About the writer:
David Hurley is a Business Coach with Pro-actions group of companies.