Plan For Success

In business there are no accidental successes. Having a good product or service is not enough and every business needs to follow a rigorous planning process in order to lay solid foundations for success. Remember that “no one plans to fail …. but this is what you will get, if you fail to plan”.

Why Plan?

The most common reason for a business plan being prepared is to gain funding for the business. However, an annual plan provides many benefits:

• The opportunity for you – as the business owner or manager – to “step outside” the business and re-examine what is really important
• Focus to your actions throughout the year
• An objective method for gauging progress towards your business goals
• A means of gaining a common commitment from the entire organisation

Key Elements Of A Business Plan

A business plan contains the necessary strategy (and underlying assumptions) for a business to achieve the objectives of its owners.

While the actual content and emphasis of an effective business plan will vary depending on the nature of the business and the purpose of the plan, the key elements of a typical business plan include:

1. Business Summary : Brief description of the business; it's products and services; the market and it's potential; objectives and strategies; and it's structure
2. Marketing Plan: The market – industry, competition and market segmentation; customers; SWOT analysis (strengths, weaknesses, opportunities & threats); sales and marketing objectives; competitive advantage; products and services; pricing; promotion; sales distribution
3. Financial Plan: Current and planned financial position – income statement, balance sheet & cash flow; and a risks & mitigation plan
4. Management Plan: Organisation structure and key personnel
5. Project Plan: Specific planned actions – each with time frames, responsibilities and the method of measuring success
6. Backwards Planning: Although not widely practiced, backwards planning is a useful technique – especially to check the reasonableness of your business plan. In backwards planning, you:

Start with the desired outcome

Then progressively work backwards through all the steps in the process that lead to the desired result At each step, ensure that you have included an appropriate action in the Project Plan to produce this result:

For example – if you have assumed that sales revenue will grow by 20% in the coming year, work backwards through your sales process to determine how many additional customer inquiries will actually be needed to achieve this and then check whether the actions included in the Project Plan will deliver this result.

Planning Tips

• Tailor the plan to suit the purpose. In particular, if the plan is being prepared to obtain external funding, establish in advance what the prospective financier expects to see
• Set aside time specifically for planning - free of any distractions
• Be as objective as possible – you are only kidding yourself if you aren't
• It should be about quality not quantity. A well conceived 10 page plan is far better than a 50 page plan that may never be read
• Involve your staff in the planning process. You are likely to end up with a more practical plan and your staff are also more likely to take ownership of the actions that will be required to achieve the plan
• Look on planning as ongoing process – it should be refined throughout the year – especially if any of the key assumptions change
• Finally, never lose sight of the fact that, while a good plan is the foundation for success, it is the effective execution of the plan that ensures success.