"Who fails to plan, plans to fail."
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When you set goals for yourself or for your business it always pays to remember S.M.A.R.T.E.R. (Specific, Measurable, Attainable, Realistic, Tangible, Ethical, Resourced)
So it is with your Business Plan. The purpose of a Business Plan is to plot the course upon which you plan to take the business over the next three to five years. With this in mind, it therefore needs to be something that is equally motivating to your staff as it is informational to your accountant and your bank manager and instructive to your management team.
S. Specific / Significant / Stretching
Your business must grow at least as quickly as costs and inflation escalate, or you will soon be out of business. Make the targets for which you aim difficult but within the capabilities of yourself and your people… and your cashflow and the amount of working capital you have employed in your business. Resource allocation and decision-making should be governed by the boundaries set in your business plan.
M. Measurable / Meaningful / Motivational
You cannot manage what you cannot measure. To this end, your Business Plan must refer to a set of Key Performance Indicators or Milestones which you have set in advance. That way, you can tell whether or not you are on course for the target you have set yourself. There is little point in getting to the end of a year and finding you were pursuing the wrong targets and strategies. Measure often and accurately (but don’t let that process take more than a few minutes a day or 15 minutes each week). Define also what constitutes success.
A. Attainable / Action-oriented / Agreed
The best-laid plans of mice and men… Your business is comprised of you, your staff, your customers and your suppliers. Know what you can expect from each of those parties and how you will get the tools and efforts to deliver upon your expectations. There’s no good in setting off on a five-year journey if no-one around you believes you can do what you’re about to attempt. That’s not to say you shouldn’t be prepared to surprise them all with determination and results.
R. Realistic / Relevant / Rewarding
Remember, you have to sell your Business Plan to your staff and its products to your customers. Get them all involved… You can’t sell a secret. People will tell you if you’ve aimed too high or too low, especially if you ask them. Others will participate if they can see something in it for themselves, though you may be surprised that most people are motivated by results and achievement, more than they are by monetary gain. It’s easy to “Make a Million on a Spreadsheet”. You may have to keep drawing people back to the nitty-gritty of the plan, to ensure results.
T. Tangible / Timely / Trackable
Have you allowed the right length of time for each milestone to be met? If you leave too little time you will quickly become discouraged. Too much and the energy will go out of the effort and into something else. Make your milestones mean something… rewards or celebration or recognition. Then follow through and make sure the people involved see those rewards and celebrations being distributed. It’s important!
E Ethical / Equitable
Most people won’t follow a course of action that is unethical. Nor will people deal with you, if you act unethically. Don’t expect to be in business long, or to keep your people around you if anyone can see that you’re engaged in sharp practice or not doing the right thing at all times. If you’re planning to treat people fairly and equitably then business will probably go better for you.
R. Resourced / Researched / Reinvest
What will be the effect of taking resources and people from any existing business / tasks and devoting them to a new project? Will it reduce the business’s capacity to meet its financial and service requirements? Time spent on reconnaissance and research is seldom wasted. Have you worked out the size and appetite of the market for your proposed product or service? Is it already an idea past its time? Finally, have you planned to reinvest profits and results into growth of the existing project and the new project? After all, the primary reason for most business failures comes down to a lack of research; a lack of resources or a lack of commitment.
Your Business Plan may start out life simply; maybe as a document prepared to secure funding to either expand or acquire the business. However, it can go from there to become a powerful tool for getting things done once you own the business.
Oakshield’s expertise lies in helping create compelling Business Plans that become practical guides for decision-makers in the business. At the same time they establish the key objectives and benchmarks by which performance is measured.
To be practical, a business plan must contain:
- A deep understanding of the business’s strengths, its people and the competitive landscape in which it operates.
- A realistic assessment of the starting point and the resources to hand and any constraints that will have to be met or overcome;
- A creative action plan to take the business forward, in light of the key drivers of value creation over the planning period.
Take the time to ensure that the people creating the plan know how to deliver the forecast results and that they have thought through and identified all of the resources and action needed to make it happen.
For instance, you may identify that in Year 3, 25% of sales will come from new products. The plan should therefore show and predict the costs and timeframe for your cycle of product development. You should also devise a method of measuring current sales / results so you can readily move to cut over to the new product or service as the old one loses vitality and appeal in the market.
Oakshield recognises every business is different. We always take a tailored approach to Business Planning and would be happy to discuss how we can help you in this key task.
Click here to obtain your free ebook, “Business Planning : The Oakshield Way”