Article by Doris Valade, The Malabar Group Inc.
“I don’t need a business plan!”
I had my own business for over 30 years, but 10 years passed before I did my first written business plan. It was the best thing I ever did for myself and the growth of my company. I kicked myself for not doing it sooner!
“If you fail to plan, you are planning to fail” — an old adage, but one that still holds true. As a business owner, you probably have most of the business ideas and activities in your head. You know every aspect of the business as you look at the bank balance, vendor payments going out, sales coming in, etc. You may be thinking, “… but I don’t need a business plan.” Trust me, you do. It’s not enough to have these things in your head. A plan makes it easy to update things as your business evolves. It also makes things easier for those who will step in if something happens to you as the owner (their names should appear in the business plan too!) To use another oldy but goody from a John Lennon song (originally from comic strip artist, Allan Saunders) “life is what happens to you when you’re busy making other plans.” In business as in other areas of your life, you need to be prepared for anything. Think pandemics!
Without a plan …
“Without a plan, even the most brilliant business can get lost. You need to have goals, create milestones and have a strategy in place to set yourself up for success.”
– Yogi Berra, baseball great and successful entrepreneur
As business is returning to a pandemic version of normal, now is a great time to do your business plan. As the leader in your company, you are responsible for planning for sales growth and innovation through new products and services. How can you plan for tomorrow, if you don’t have a solid understanding of the position your business is in today? Clarify your thinking by putting your thoughts on paper and organizing it all into a written plan. Once your plan is complete, not only will you be more confident in the future, you will have the confidence of your team and a comprehensive document to share with your bank to support required funding or to use when applying for grants.
The planning process helps to identify any possible mistakes or trouble areas that need your attention, including cash flow issues (running out of money!). You’ll learn whether your prices are too high or too low. Are your products the best fit for your market? Do they meet your market’s needs? Your business plan is the first step in developing a strategic growth plan to ensure your company’s ongoing success.
What should a business plan look like?
A written business plan puts on paper a detailed profile of the key components of your business, including the following:
- Company Overview – a brief description of your company and where is stands in the marketplace.
- SWOT Analysis – helps you identify and understand the Strengths, Weaknesses, Opportunities and Threats that surround your business.
- Marketing and Sales Plan – understanding your target market and key product offerings is key. Review your pricing strategy. How will you distribute your products? What advertising and social media tools and platforms will you use to reach out to current customers? How will you attract new customers?
- Management Plan – describe the ownership, employee profiles and job positions and any external professional resources (accountant, mentor, advisor/consultant, etc.) By the way, a mentor is invaluable to a new business owner!
- Operating Plan – outline of the physical requirements of your business, including office building/space, warehouse, equipment, inventory, labour, etc.
- Financial Plan – this includes your cash flow statement, balance sheet, break-even analysis and projected income statement to show your growth plan for the first year if you are starting a new business, or a projection for the next three years for an established business. A three-year projection gives you the opportunity to consider possible new projects, products or services. You might consider putting more money into marketing or expanding your sales team.
You don’t have to go it alone
Business plans like businesses benefit from collaboration. Why not include key members of your team based on their areas of expertise that match the plan’s components? Collecting the information can be a team effort which encourages a variety of perspectives. Reach out to your advisory board (if you have one) or to your mentor.
If you are a start-up business, maybe all you need is a simple one-page plan that you can build on as the business grows. For an established business, a more comprehensive plan is recommended to ensure that you have considered all aspects of your operations.
The SWOT Analysis
The one component of your plan that is critical and will be most insightful is the SWOT analysis. You will identify strengths and weaknesses within your business and understand the external opportunities and threats that exist in your industry and business in general (trends, legislation, economy; and at the moment, this includes pandemic effects/protocols). If you decide not to do a business plan (I really hope you don’t take this route) then I strongly recommend you at least do the SWOT analysis.
So, what’s next?
Making the time and effort to complete your business plan provides you with the opportunity to look at your business as a whole; make changes where needed and set priorities. It is an investment in you, your future and the future of your business.
A helping hand …
You’re busy! Making time to do a business plan is probably last on your list of things to do. A template will be helpful as will guidance on how to write you plan, so I have included templates for two types of business plans and one for the SWOT analysis on my website (all free) – www.malabargroup.ca
If you are looking for further guidance or support in doing your business plan, or in growing your business, send me an email and we can talk! doris@malabargroup.ca