“Without a business plan, you have a dream with no stepping stones,” says Michael Griffiths, small business coach and CEO of Michael Griffiths & Associates.
“A business plan ensures you know where you’re going, what you want to achieve and the action steps required to get to your goals,” Griffiths says.
“Business owners without a business plan usually find themselves not growing or taking the required steps to move the business forwards. Their heads are usually stuck in day-to-day routines rather than business growth strategies.”
Even veteran business owners often fail to recognize the importance of creating a business plan, adds Michael Altenburger, Small Fish business coach.
“In my experience, only very few SMEs have a formal written-down business plan. Not many know exactly what a business plan is or what purpose it serves. Those who do know often feel overwhelmed by the daunting task of creating one. Lack of experience adds to the problem.”
Altenburger adds that having a plan, especially in written form, helps quickly determine that things are heading in the wrong direction (hence ‘not going to plan’) – not when it is already too late.
Putting it together
Simply put, a business plan is a written description of your business and your business goals. It can be used to help you describe your business to potential investors, attract employees, or prospect for new business.
The structure of your business plan will reflect who is using it. If you’re looking for finance, your business plan might be slightly more detailed than one that will be used internally for staff.
So step one in creating a plan is to determine who the plan is for. Deciding whether the plan will be used internally or viewed by third parties will help you target your answers.
According to Griffiths, it doesn’t need to be pages and pages long. There are many variations of business plans, but a basic business plan typically includes:
Description of the business:
This is your management plan. It typically covers information regarding the structure and premises, staff, your relevant experience and services.
Market analysis and strategy:
This section includes an analysis of your industry, your target market, and your competition. It should also outline your key marketing tactics to reach your target audience.
You might want to include your business’s vision statement, your plans for the future, your business goals (short- and long-term) and how you intend to reach them.
This includes how you’ll finance the business, and outlines the operational costs and earnings, and projections.
This can be short and sweet – just a one-page overview of your business.
When it comes to outlining your goals, Griffiths suggests: “Start with 12-month goals and ask yourself, what outcome do you want in the next 12 months? Set three to five goals you want to achieve, then break it down to three months, six months and the next 30 days. For example, if you want 100 customers in 12 months, how many do you need in the first 30 days?
What stepping stones or action tasks do you need to be doing to ensure that your goal comes true? Remember, a goal is no good unless it has action steps to get you there.”
There are no hard and fast rules regarding how often you revisit your plan, although Griffiths suggests business owners check at least on a quarterly basis: “We revisit ours every month to ensure we focus on the next 30 days and what needs to be achieved.”
According to Altenburger, a formal review of the plan should be conducted annually. “On these occasions the goals would be re-evaluated based on new information available,” he says.
For mortgage brokers, a business plan is an essential tool in helping you realize your goals.