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Business plans are boring

January 02, 2012 at 10:06 AM

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Much will be written about business planning as we embark on a new year. The general consensus seems to be that business plans are quite important, perhaps even key to achieving success - do you agree?

 

If business plans are so important, then why do so few businesses have them?

Perhaps it is the thought of spending hours on a document that will probably spend most of its life in a drawer that puts people off. Or maybe it's because business owners aren't sure where to start..... or how to turn their business plan into something useful, something inspiring, something that will really help move their business forward.

Imagine what would happen if you were able to create a business plan that helped you achieve dramatically different results in your business.....that plan certainly wouldn't be gathering dust in a drawer!

But where do you start? Here's Wow's top tips:


This is YOUR document

You are not creating this for fun, or to tick a box on a loan application for the bank..... this is a document that needs to be useful for you. That means it needs to be clear, simple and, most importantly, it must help you identify what you need to do to move your business forward. Before you start, have a think about why you are in business and what you would like your business to achieve FOR YOU!


Begin with the end in mind

"To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you are going, so that you better understand where you are now and so that the steps you take are always in the right direction. It's incredibly easy to get caught up in an activity trap, in the busy-ness of life, to work harder  and harder at climbing the ladder of success, only to discover it's leaning against the wrong wall." Stephen Covey


So, how can you ensure your ladder is up against the right wall? Have a think about the following questions:

  • What is your vision for the future of your business?
  • What would you like your business to look like in 3 years?
  • Can you draw a picture of it?
  • What principles will your business be built on?
  • What are the key elements? Turnover, profit, staff, markets, clients, products/services, how will you be spending your time?


What's your strategy for growth?

What’s your ‘big idea’ that will move your business forward? Are you planning to pick up more new customers? Or sell more to your existing ones? Perhaps you will focus on a particular product or service, or create a new one? Maybe your growth will be propelled by a move into a new market?

Whatever your strategy, make sure you are clear on what you are going to do differently to get different results.


Break it down

Set yourself SMART objectives and break these down into short, medium and long term goals.

  • 3 year objectives - what key objectives will you have achieved in 3 years?
  • 12 month objectives what is going to move your business forward in the next 12 months?
  • 3 month objectives – what do you need to do in the next 3 months to build real momentum?


Know your numbers

Produce a Cashflow Forecast for the next 12 months to check your plans stack up. This will help you work out what sales you need to achieve (and what to keep your costs down to) in order to make the profit you need.

If you need help with creating a Cashflow Forecast, please get in touch with Wow by e-mailing info@thewowcompany.com

Once you have created your Cashflow Forecast, it is really important that you review it regularly against your actual results. If you are not producing MONTHLY management accounts to review your progress, perhaps you should be?


Take action

"An ounce of action is worth a ton of theory." Friedrich Engels
"He that waits upon fortune is never sure of a dinner." Benjamin Franklin
"You don't have to be great to get started, but you have to get started to be great." Les Brown

We've all heard the quotes before and all know what we need to do, so let's just do it!

  • What is the first action you need to take? Can you do something different in the next 24 hours? Taking this first, simple step builds momentum.
  • List all the actions you need to take when will you complete them? Put them in your diary. Enjoy crossing them off your list as you make progress towards your goal.
  • Don't just talk about your plans..... make them happen!


Don't do it on your own

Why do it on your own when there are so many people out there that can help you get to your destination quicker? Seek out good external advice speak to your Accountant or Business Adviser to get a different perspective on your plans. Have someone challenge your thinking, sanity-check your numbers, offer further ideas and inspiration to help move you forward.

Who can you collaborate with to make this easier? Speak to your suppliers and anyone with a vested interest in your business.


Review your progress regularly

Review your original plan regularly to check you are on-track......and don't forget to check the numbers - they don't lie!
Set yourself a range of targets to measure performance, so that you have your own business dashboard. When creating your dashboard, think about:

  • Leading indicators - these tell you want is likely to happen in the future, e.g. number of proposals issued (combined with a historic conversion rate) is an indicator of the amount of future work you are likely to receive.
  • Lag indicators - these tell you what has already happened. The amount of money in your bank account tells you what has happened in the past, not what is going to happen in the future.

 

If you'd like to create an exciting business plan, Wow can help! Click here for more details.



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