Do you have a business plan? An actual document that outlines in detail the roadmap driving your business strategy and ultimately your business success? Do you really? No judgement here! Many of our clients don’t have a business plan that informs their activities, or, if they do, it’s not a document that has any real, tangible impact in either their day to day or in their more long-term strategic decision making. However, a business plan provides an opportunity to make an indelible, indisputable influence on the long-term success of a business.
Starting a business is so exciting! There’s business/company names to register, there’s logos to select, websites to launch - it’s like the honeymoon will never end. You just know that you’re onto a winner - how could you not be? Who needs a business plan, that stodgy, boring document that puts you to sleep just thinking about it?
OK, we get it; a business plan with questions that are basically a big, fat dampener to your enthusiasm could possibly not be seen as sexy (ouch!) and in the tempestuousness of business life, planning to this level can get pushed to the bottom of the priority list. Done properly, it’s an extensive slab of work, which is why it can be tempting to put in the too-hard basket, or the ‘stuff-it’ bucket, as it’s known around Cocoon HQ. However, it’s an exercise well worth doing, as research out of Harvard Business School discovered that entrepreneurs who invested time and resources into creating a business plan were 16% more likely to achieve not just viability, but measured success.
So, what is the purpose of a business plan? With apologies to the Shakespeare aficionados in our mix, let us count thy ways:
· To prove that you’re serious about your business.
· To establish business KPIs.
· To better understand your competition.
· To better understand your customer/client.
· To voice previously unstated assumptions.
· To assess the feasibility of your product/service.
· To document your sales income model.
· To determine your overall financial needs.
· To attract investors or to attract business partners.
· To reduce the risk of pursuing the wrong business opportunity.
· To force you to research and really know your related markets.
· To attract employees and a top-notch management team.
· To strategise your progression and focus your efforts in the right places.
· To position your brand.
· To measure the success of your business.
· To reposition your business to deal with changing economic or market conditions.
· To document your marketing plan.
· To understand and forecast your business staffing needs.
· To uncover new opportunities.
See, there’s lots of reasons to do a business plan, but bottom line? Your business plan will help you navigate your business as you are operating and as you grow. Think of your business plan as your business “GPS”, navigating your business towards ongoing success. It supports you through each key area of managing your business and is a way for you to think through and detail all the key fundamentals of how your business will operate.
A business plan is a dynamic, living document, which means that while ideally you would sit down and prepare a business plan before starting your business, it is never too late to knock one out. We all know that what is ‘ideal’ and what is ‘reality’ are two completely different points of the same path. We have Cocoon clients who describe themselves as having ‘fallen into business,’ and creating a business plan is a way for them to take stock. So, if you’ve already started your business, don’t panic. It is never too late to sit down and do a business plan.
OK, OK, you’re convinced. Let’s get writing!
There is no right or wrong way to write a business plan. You can pick a plan structure that works best for you. What’s important is that your business plan meets your needs. Business plans can be five pages or fifty-five pages long. The length is not as important as the substance. A ‘Business Plan 101’ can be as simple as a basic five section business plan (see resource) and for some businesses, they really don’t require anything overly complex. We generally encourage people to start with the basic five sections and then they can extend on this as necessary.
Traditional business plans are more common, use a standard structure, and encourage you to go into detail in each section. Traditional plans tend to require more work upfront. Lean startup business plans are less common, but still use a standard structure. They focus on summarising only the most important points of the key elements of your plan. They can take as little as one hour to make and are typically just one page.
As a business plan is a roadmap to success, in order to stay focused and on track, it can’t sit unread and unloved in the bottom of a (usually closed) filing cabinet. Rather, it is important that you know how to use your plan dynamically, at least once a year. Reviewing it regularly and updating it is a way of keeping it current and also becomes a record of your evolution as a business over time. This can be as simple as adding it as an agenda item to your regular date with your numbers (link to relevant post) or to your annual planning process.
Do you have a business plan? Business plans can be five to fifty pages long, and as simple or as complex as required, but bottom line? They’re a way to drive your success. We've uploaded a free business planning booklet here to help guide you when writing your business plan.
