Business Planning: The How (Part 4 of 6)

There are many ways to skin the proverbial business planning cat which will depend on the size of your business, how long you have been operating, who is involved and how much revenue you have. The essential elements that you will need to do are:

  1. Review your previous plans (if you have one).
  2. Analyse your business.
  3. Analyse your business landscape.
  4. Review the information that you have gathered.
  5. Make decisions about your future strategy.
  6. Document what you are going to do and the results of your review, including budget and marketing schedule.
  7. Create a list of actions that makes everyone accountable.
  8. Create a schedule to review your list of actions to make sure they are getting done.
  9. Create a schedule of regular meetings dedicated to reviewing progress.

If you haven’t done any kind of business planning before, then it’s probably a good idea to start with a full business plan so you really understand the process, then you can tailor your practices later. That could mean a quarterly review cycle where your ‘board’ get together to review your progress, for example. Equally it could mean a monthly meeting with your decision makers. Whichever way you decide is best for you, it is vital that this is dedicated time, that each attendee is fully prepared, the meeting is chaired and actions are taken from the meeting.

Where to start

From here on I will describe the creation of a conventional business plan so you will know how to get started. Every business plan starts with a template: an empty standard document with each section ordered and prepared for you to add your specific information. There are countless templates available online, some paid, some free. Get one that is aimed at small businesses and is free, such as one available on www.big-small-business.com.

Starting at a blank template can feel daunting, so start off by entering everything that you do know, no matter how rough. This helps build some momentum and will automatically show you the ‘holes’ in your knowledge and what you need to research. Get examples of completed business plans first so you can look at how they look when completed.

Work on one section at a time; finish it and then move on to the next one. If you find some useful information for a different section, keep it, park it and come back to it later. There will be a lot of information once you start looking, so take your time, sift through it and just use whatever is relevant to your business. If you encounter questions that you don’t know the answers, don’t just guess. Do actual research: search online, talk to people and get actual quotes when you need prices. Your plan needs to be based on cold hard facts, otherwise it is meaningless. And remember: keep it simple! There is no point having a long complex document that sits on a shelf and gathers dust.

Don’t be afraid to ask

If you haven’t been in business before, it can be difficult to create a plan that is realistic or thorough enough, because you just don’t have the experience or knowledge. In this process you must accept that there are many things that you don’t know you that you don’t know. Business planning is a process of opening your eyes. For this reason, getting external advice or input is essential. Having an experienced businessperson to look at your plan, ask questions or guide you through the process will add considerable value. The aim is to make your plan as realistic as possible, so challenging your assumptions is very important to make sure they are robust and will stand up to the demands of the business world.

The ideal situation is to have an experienced small business consultant work with you to guide you through the process, ask you a lot of questions and give you a sanity check on what you are proposing. For those on a low budget, you may find government-sponsored business mentors who can give you guidance, or you may have friends and family who are experienced in small business that you can ask.

Where to look for information

Getting meaningful information for your business plan needs some know-how and persistence. Big businesses have teams of analysts to dig deep, but you will have to roll up your sleeves and do it yourself. The good news is that the act of finding out information yourself actually makes it more meaningful. Here are some useful places to start:

  • Government, business centres, local councils and statistical organisations have good broad data on populations, council plans, traffic, etc. that can be useful for ‘big picture’ information.
  • Professional associations are good places for industry-specific news and data.
  • General Internet searching will uncover some interesting information, especially if you look specifically into your industry and location.
  • Business networks, associations and groups offer good information and great networks of experienced people.
  • People in your industry will already know a lot of information that will be of interest to you. If you can find someone already in your type of business from a different city or area that is ideal.
  • Your potential customers. Doing surveys is incredibly useful, as it gives you insight into what your customers want.

One business plan I worked on was for a man who wanted to start a retail shop selling nuts. He had already found a retail premises that he was keen on, so I did some research and was lucky enough to find some data on foot traffic for that area (which was very low). As a result of this, I recommended that he keep looking and find a site with higher traffic. Even though he would be paying more rent in a different location, his chances of success were much higher.

 


Warren Harmer

Warren Harmer

Owner at The Business Plan Company

Small, fast growing and entrepreneurial businesses are my passion. I like to write business plans for them, grow them, advise them and write about them. My experience now spans over 17 years, including 3 businesses of my own. My objective is to offer instructive, hands-on, ‘how to’ information to make business ownership easier, less stressful, more successful and more enjoyable.

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