If you’re a small business owner, you might think that business plans are only useful if you’re looking for external funding or support. If this is your view, then all that effort that goes into creating the perfect document can be lost as soon as funding is received. But look at it another way. Embarking on business planning can add real value to your business, and not just for external stakeholders.
There’s a high chance that any new business owner will have had a similar conversation with their business advisor: do your market testing, create a business plan and secure the necessary funding. And I’m sure many of us looked out a template document to complete, diligently working through the different sections to make sure we’d ticked all the boxes.
But writing a business plan doesn’t really count for proper business planning. Why not? Because the very nature of the plan suggests a static, time-bound document that loses relevance almost as soon as its written. Business planning is a much more dynamic process. It forces you to take a step back, to review your entire value proposition, and look at your ideas from different perspectives
For a small business developing products or services, this activity should be an essential part of your day-to-day management. Here’s how.
The first step in business planning is evidence gathering. You need to collect all relevant information together in order to create the evidence base you need to make informed decisions. This evidence base is likely to consist of:
Only when you have all this information, can you begin to plan in earnest. And the process is a simple one: throw all the evidence into the pot and be creative! Cover all the immediate and obvious bases – what you need to do to deliver your day-to-day – then step outside of the business-as-usual to see what the evidence might reveal. Does your business idea need revisiting to make it more sustainable? Have you overstretched your resources so that you’re impacting on quality? Or are you missing an obvious market opportunity?
This process is an obvious step when you start your business, but it can continue to add real value. So, once the evidence has been gathered, take the time to refresh your business planning regularly. Make it a valuable business tool, rather than a tick in a box. The evidence base you captured at the start should form the backbone of your business – updated whenever needed – with your initial plans able to flex as your business grows. This review might take place every month, or every six months, depending on the size and complexity of your offer. What is important, is that you stick to a regular schedule that works for you.
This regular review means that you can start to use your business planning to measure your success, test new ideas and determine the shape of your business as it grows. Planning forces you to look at the different elements of your operations, including your finances, marketing and staffing. And it reveals connections that you might not otherwise spot, meaning that you can avoid potential risks or take advantage of potential opportunities. Regular planning ultimately becomes a way to help you manage every aspect of your business.
Our advice would be to dust off your business plan and develop an approach to business planning that suits you and your business. Treat your initial business plan as a working document rather than a finished product, and put time in your diary on a regular basis to make sure your business is on the right track.