Do you find you don’t have time to do any business planning? Are you too busy getting on with the actual business side of things, the things that get the income coming in? Or perhaps more honestly, you think that “planning” or “strategy” is:-
a) boring as heck?
b) a mystery?
So What Is Business Planning?
Well there’s the start-up business plan which is your tool for setting out your initial goals and how you will achieve them. It takes a detailed look at your proposed business idea and how likely it is to succeed. It includes financial forecasts covering what money you see coming in and going out of your business. It usually covers a 3-5 year period. This video explains more about it – https://www.gov.uk/write-business-plan
ONGOING MONITORING & PLANNING
You’d be forgiven for thinking that “business planning” was only something to do when starting up rather than running a business. If you google “business planning” for example, a high proportion of articles will be about start-ups and creating you first business plan.
But once you’re in business, it pays to refer back regularly to your original plan to see whether things are going according to plan, financially and in relation to your other goals.
If you aware that things are not going to plan, you can do what is necessary to address any issues before they become critical. Also unexpected changes can be positive developments. You may find a market for your audience that you hadn’t been aware of before. If you take the time to look at how these changes fit in with your overall goals, it will help you keep focussed.
In addition to regular monitoring of your cashflow, you might once a year, review your goals & make plans in the areas of finance, sales, marketing, HR, for example.
Setting measurable objectives for the year ahead makes it easier to monitor your performance. So rather than vague goals such as “increase sales” or “raise company profile” set specific and realistic targets such as % increase in sales, 3 articles in local paper, x number of facebook fans, reduce overdraft by x amount.
I’ve talked to several people who run small businesses over the years and I’m always amazed that planning is often so far down on their agenda or sometimes not on their radar at all!
If you applied that logic elsewhere it would seem a bit odd. For example, you don’t step out of your front door in the morning without an idea of where it is you’re going.
A while back I was working as Communications Officer for an organisation and had been asked to produce a Communications Strategy. I was talking to my boss one day about the importance of strategy and said “if you don’t have a strategy, you’re in the dark, a bit like trying to pack for a holiday without knowing where you’re going “. He said “Oh! I’d happily go with an empty suitcase!”.
That taught me a valuable lesson. To remember that not everyone has the same outlook on life, the same values or personality. Luckily for me, I like planning, I’m more of thinker than do-er, so it’s not a chore for me to spend time analysing and committing ideas to paper. But if you’re a do-er I can quite understand that you may well prefer to watch paint dry than sit down and write business forecasts.
If for whatever reason, you find yourself saying “no” to the task of business planning, at least be aware of how vulnerable that makes your business. Lack of planning is often cited as one of the reasons for small business failure. There’s plenty of guidance on planning out there. Here are a few sources of information to start you off:
For further business tips, check out our blog post on simple accounting tips.