When it comes to growing your business, that growth is not just defined by a single thing, like an increase in sales, it means putting something in place that is critical to success, robust, meaningful, and sustainable. Very little of this is simple and nor is it achieved overnight or in a single step. So getting there requires business planning.
Many Business Owners will have some form of plan for day to day, or week to week management of business operations. This type of planning is essential, and is an area for continuous improvement. Better business planning enables better execution.
The main goal of the Business Owner is however to “grow the business”. This is the route to creating wealth through your own business. However, this is the space where there is most commonly ‘no plan’.
It is not uncommon for businesses to grow to a particular size, and then they become stuck. Any form of sustainable growth is elusive. After closer inspection, one can find absolutely no evidence of any robust thinking or plan for growth. Lack of growth is therefore no surprise.
The size and complexity of what you are intending to achieve, is going to determine the size and complexity of the plan required.
- You might require a 90 Day Business Plan to give direction for the next quarter, OR
- You might require comprehensive Business Planning for the next year to 5 years.
So, here are 10 good reasons why you need a Plan
- Step back from the chaos: Managing the business day to day can be chaotic. Time flies past as you move from one thing to the next, and as you rush from extinguishing one fire after another. Planning is the discipline that forces you to pause and think. How do you stop the chaos and prevent the fires. Many Business Owners do not plan as they feel that they do not have the time for this essential task, or because the previous plans have been disrupted and never realised. This is the chaos factor. Business Planning is precisely what is required to disrupt the chaos.
- The Blueprint for success: Achieving the short- or long-term goals or objectives that you have set for your business are unlikely to be achieved by accident. Building anything meaningful, effective and sustainable requires some form of a plan. Resources such as time, money, people, and energy need to be brought together in some logical and sequential manner.
- Maintain focus: Checking progress against the plan helps you to maintain focus on what is important for success. Without the plan as your benchmark, it is impossible to measure true progress and it is easy to become side tracked by day to day operational issues.
- Prove that you’re serious about your business: For most Business Owners, you have a great deal riding on the success of your business. The first person that you need to convince that you have a workable plan is – yourself. Are you committing to, and going all in on a business venture without a plan?
- You are the number 1 Investor and the Leader: Are you seriously investing your time, energy and money to start a business without a plan. Are you seriously committing your time, energy and money to another year of running your business, without a plan? If you cannot even put in the effort to document some kind of a plan – why should anybody follow you as ‘The Leader’. What does it say about Leadership when the plan is ‘wing it’, or ‘make it up as we go along’. What does it say to your team and investors when your actions say ‘there is no point in making plans’? If you have not thought through what needs to happen next – why should anybody follow you as the ‘The Leader’?
- To establish business milestones: The business plan should clearly lay out the milestones that are most important to the success of your business. You need have what in place by when? How will each milestone help the business to grow or improve? A milestone is something significant. It is a demonstration of having achieved something fundamental to the success of the business. Your business plan forces you to think about logical steps and sequencing of events. Thinking through the ‘how’ of each next step, forces you to think about strategy.
- Understand your competition: Creating the business plan forces you to analyse the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company’s competitive advantages. What do your competitors do? How do they do it? What do you need to do differently or better? And if you don’t currently have competitive advantages, to figure out what you must do to gain them. What is the plan to get ahead, and stay ahead of your competition?
- Document your business model: How well do you know the numbers? How exactly will your business make money? What are the revenue streams? What is your break-even level? At what point in time will you break even? These are critical questions to answer in writing, for both yourself and potential investors. Documenting the revenue model helps to test the thinking behind how are you going to make profits.
- Determine your cash flow requirements: Whether in start-up mode or whether you have been operating for a number of years, if you want growth you are going to require working capital and cash flow. Does your business need to raise capital? How much? At what point in time will you require capital? One of the purposes of business planning is to help you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital.
- Growth means change: If you are going to scale up a business, this invariably means doing something different or better, and that necessitates change. The plan is therefore about what must change, and what steps need to be taken to implement that change. Meaningful change rarely happens by itself. It requires thought, planning and execution.
3 Ways we can help you.
- Operational Planning: This entails us working with you to help improve your operational planning, giving you the benefit of new and different thinking that leverages our experience. The objective here is to improve efficiencies and productivity, and reduce waste, through better planning.
- The 90 Day Plan: We work with our clients to put in place this new discipline. This is the short term roadmap for growth. Establishing the plan is often supported by a Quarterly Review, where progress is objectively reviewed, and the next 90 Day Plan is put in place.
- The Business Plan: This can be anything from a 2 page plan to a multi-page detailed and fairly complex Strategic Plan. Size and complexity needs to be appropriate for you, your business and the goals that you have set. This Strategic high level Business Planning should be the driver behind the 90 day Plan. Setting up this plan, is often supported by an Annual Review, where progress is objectively reviewed, and the next Annual Plan is put in place.
You do not know just how much Coaching or Consulting might be of value to you in your business journey, until you try it. We would not expect you to jump straight in without knowing more, but we would expect you to use that “open mind-set” to at least ask some questions and explore some new ideas. Our purpose is to help you to make an informed decision, whichever option you chose.
Nothing ventured, nothing gained.
paul@40megahertzconsulting.co.za
Mobile: (27) 69 365 2984
www.40megahertzconsulting.co.za