Last week, I called a few of my business friends and clients to find out if their business plans for next year were ready. I was stunned that out of 11 none had even a written simple marketing and sales plan, yet they looked forward to selling more next year.
There is no doubt business plan is one of the most loathed activities among most traders. It is actually regarded as unnecessary document and is only prepared to suit the interest of a lender or potential partner when demanded.
Well, whereas the process of making a business plan is not pleasant, its benefits are innumerable. Study after study shows a direct correlation between a written business plan and business success.
First, a business plan forces you to build good habits such as budgeting, thinking ahead, putting your thoughts on paper and involving or at least thinking of the participatory roles of others within and without your team.
When drafting a plan you are forced to re-evaluate your resources, your team and their roles as well as external elements and participants. This in turn helps you to get organised.
Second and perhaps more important, is the goal-setting that is part and parcel of planning. When you draft a business plan, you essentially set goals. You have got to forecast your revenue, your expenses, profit and what you need to do to achieve them.
Effective goal-setting is the foundation of every enterprise. When you set business goals and write them down, you and members of the team will consciously and unconsciously focus on supporting those goals.
It serves as a guide on who to be hired, type of staff training, type of marketing promotions and customers care among other things.
The downside of business plans is inability to follow it to the letter due to rapidly changing and unpredictable nature of dominant market forces.
But the upside of it is the planning process. It forces you to see the big picture, think, get organised and list down the resources and options available. This effectively means even as market conditions evolve you will assess well-thought multiple options and determine the best path to follow.
Third, a business plan brings focus and clarity to the business. The biggest undoing is never focusing on one thing to its logical conclusion.
Don’t worry about a format. Just sit down with a note book and a pen and write down what you want to achieve within a set time frame.