Business planning – how to make it work.
By Dr. Warren Harmer
Chief Business Planner, The Business Plan Company
The enemy of business planning is the business plan, well, at least the traditional concept of
the business plan. For most small business owners, the idea of a business plan is a formal,
structured document that sits on a shelf and no-one looks at (except maybe the bank). What
that means is that the practice of business planning is seen as irrelevant, too hard or too
expensive; so is not used. Without clear direction, purpose or a set of targets that everyone
works towards, the business muddles along without achieving the outcomes it could.
By treating business planning as a practice not a single event - something that you do every
day and week - small businesses can harness the power of business planning. Changing the
mindset to one of actively planning and reviewing is the hardest part.
If we break down the 4 elements of business planning, you are asking 4 questions…
1. Where are we now?
2. Where do we want to go?
3. How do we get there?
4. Are we getting there?
Let’s look at each question and explain what’s involved.
1. Where are we now?
Understanding how your business is performing and where your business sits in the market is
crucial to your success and survival. At least once per year, business owners should
remove themselves from daily operations to take a bird’s eye view of the business. This
will allow you to see what your competitors are doing, what changes are happening in the
market, technological developments and how the business is functioning. Business have a lot
of moving parts, and you need to know what is happening in all of them. You may not have
reviewed your marketing for a while, may not know what your competitors are charging any
more, there may new products on the market, your website might be out of date or there might
be some technological disruption on the horizon. What you assume to be true may be
changing without you knowing; just look at taxis, newspapers or travel agents as a few
examples of industries caught unawares.
2. Where do we want to go?
Once you know where you are now, the next step is to set your sights on the future. Do you
want to grow, expand, introduce new services or even sell the business? Setting clear
targets, goals and objectives that everyone can see and work towards means that, in the day-
day hubbub of business, you make decisions that take you in the right direction. To outsiders,
it is often assumed that business owners have very clear ideas about where they want their
businesses to go, but my experience of interviewing business owners is that the answers are
vague. Goals need to be specific.
3. How do we get there?
Road maps are not very useful without directions, coordinates and milestones, so this question
addresses the steps and stages involved in achieving business goals. It will need you to
develop the detail, such as timelines for activities, milestones, actions for development
projects, schedules, plans and budgets.
4. Are we getting there?
The first three questions should be developed in a process of dedicated review, often annually.
To make business planning effective, tracking your results against the plan is where the
greatest impact is. Working with your plan every month, week and day is where the results will
come from. If the plan is not in your diary then it probably won’t happen, so take the big
picture goals and turn them into weekly and daily tasks so they stay top of mind. Check
milestones each month, sales targets every week, tick off the projects and market as per the
schedule. If you aren’t on course, find out why so you can get back on track again.
Getting the mindset in place is of much higher importance than the format of the plan itself.
Rather than getting hamstrung on a format that doesn’t work for you, find one that doesn’t. I
have seen businesses plan in spreadsheets, mind maps, on white boards and even a dart
board with business goals on it. Many of the business plan formats available are designed for
bank applications or government, not for real operating businesses, so keep evolving your
own to include the content that you need to steer your business to its destination. Don’t be
afraid to get help either, as a professional can work with you to make sure the plan is created
and then keep you on track.
The Business Plan Company writes thousands of business plans, tenders, grants, proposals and pitches for
small and medium businesses. Start-up businesses are a speciality.
We work with banks, migration agents, investors, NDIS, aged care and lots of start-ups, so we know what
works. Our business plans are accurate, insightful and tailored to your business.
For more information, visit www.businessplancompany.com.au