Penny, a business owner, once described her business as Groundhog Day. It seemed the same day-in-day-out. While she and her husband weren’t going backwards, they weren’t making progress either. Ideally, they wanted their business to grow over the next five years so that they had more for their retirement/post business years and also so that they could maximise the value of the sale of their business.
Like ninety-five per cent (or more) of small business owners, Penny and her husband didn’t have a business plan. This one business strategy — planning — can have the biggest of all impacts on your business.
Planning is the keystone
All strategies to grow and improve your business need to be scrutinised, strategised and scheduled …i.e. Planning.
Planning helps you to stay focused on what matters most to your business growth and profit improvement.
In the rest of this article, I’m going to take a KISS (keep it short and simple) look at business planning in small business.
Writing a small business plan
You’re ahead of 95% of the business population (including your competitors down the street) if you write a business plan. The fact is that most people don’t write a plan, defaulting instead to “I’ve got my plan in my head”.
No they don’t! As a business owner, you have a tremendous amount on your mind with the day-to-day running of your business and your family. Thinking that you can also hold front of mind the goals, strategies and tactics of a plan to grow your business is fools play.
What’s the purpose of a written plan?
You need to write your plan down.
Business plan templates are often of little value. Typically they are templates of the type used to raise capital and are overly complex. Templates available on the internet can be offered by those with a more academic approach to planning. These do not support the practical day-to-day improvement process you need in your business.
So how complex should you plan be?
If you’ve never planned before, keep it super simple!
If you take a complex planning template and try to complete it, you’ll end up filling it with data just to complete the template. You’ll end up frustrated with the process and when you look at the document on Monday, it will offer little in the way of practical guidance to get your business transformation underway.
Simplicity is the key. You can always make next years plan a little more sophisticated as your own skill and experience with planning increases.
Think of your plan as a living document. If you need to change, refine or add something a month or two down the track, then you can do that.
With that in mind, heed the advice of American Civil War Captain Oliver Hazard Perry and set your goals in stone and your plans in sand. Of those who do actually plan, too many of them fall in love with the plan. No! Fall in love with the goals.
What this means is that if your strategies aren’t working and you are not progressing towards your goal, then make a change. You may need to change the way you are implementing the strategy (i.e. the tactics) or you may need to change the strategy altogether.
This preparedness to change the plan is very important. However, as a business owner, you need to be disciplined enough to leave your goals in place. Lowering or changing your goals because the plan isn’t working is a sure way to fail long term.
Elements of a small business plan
Let’s have a look at the sections you need in a business plan for your small business when you are first getting started.
1. The Big Picture
The first thing is The Big Picture. The second is your financial projections and KPI’s. The third is your operational strategy. Each is covered briefly below, including purpose, values, vision, goals and competitive strategy.
Your purpose is your true north and you need that steadfast direction before you craft a vision and goals for your business. The second thing then is the values that you will operate by. Your values act as ‘behavioural guideposts’ on your journey. These are very closely related to your purpose, so they are a good fit.
Vision and Goals
The third element is your vision. This vision needs to be a ‘rich picture’ of the future of your business. Describe it fully and in detail. From there, the fourth element is your goals. Your goals are the stepping stones towards your vision. It is best to set five, three and one-year goals.
The fifth element is often overlooked. It is your competitive strategy. In other words, how are you going to win in the marketplace? Consider the product/service that you will offer, the ideal customer that you want to have and the advantage that you will build over the competitors in your niche (best product, best cost or best relationship with customers). For most small businesses best relationship with customers is where they can excel over bigger customers. Equally, top-class customers look for positive relationships with suppliers and will often value this over slight differences in price.
2. Sales Projections and KPI’s
The next section should be a projection and strategies to improve your financial performance of the business. The metrics to look at here are lead generation, sales conversion, average customer spend, customer repeat purchase and margins. You need to work out how much each of these areas needs to improve in your business this year and then set strategies in place to make that improvement.
This can be a fun exercise to calculate the revenue and profit improvement that comes from small percentage improvements in the areas mentioned above.
The third section of your business plan is the operational aspects of the business. A common mistake made in planning is to set goals, project financial performance improvement but not look at what areas of operations need to improve to support increased sales.
Think of it this way. What if you went to the office tomorrow, and your sales doubled? Where would the wheels start falling off? Where would the bottlenecks occur?
A good way to identify the operational areas to improve that will help facilitate your growth goals is to do a quick SWOT analysis on a number of areas of your business. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
The area of your business to do this on include, but may not be limited to;
Customers are target markets – including all aspects of marketing and sales
- Products and services – all aspects of your product/service mix
- People and organisation – staffing, skills, reporting, org chart
- Leadership – owner and supervisors
- Resources – people, money, assets
- Systems and processes – how you do the work in your business, efficiency/effectiveness
- There could be other aspects that you’d like to review also.
The type of SWOT analysis will help you identify the operational improvement that you need to make to (a) support sales growth, (b) improve customer retention, and (c) increase profit margin in your business, and more.
4. Budget and Cash Flow
The fourth major section of your plan needs to be a budget and cash flow projection. Get your accountant to help you with this. This is a good opportunity to sit with your accountant, let them know about your growth plans and seek and sage advice from them. Once you have the budget and cash flow, review it at least every month and sit down with your accountant and review it at least every quarter.
The plan above is simple. I will comprise one page for the big picture, one page for the financial improvement, one page for the operational improvement, a page for the budget and a page for the cash flow projection. Five pages all up! That is a nice tight plan to guide your weekly activities and decision making throughout the year.
Don’t keep your plan a secret. Get your team involved. Help them understand what aspects of the plan that their individual job directly impact. Also, help them to break down a simple Action Plan for their job that helps achieve the overall business plan for the year. This is one of the best employee engagement strategies of all.
Keep the plan alive. Meet with your team for an hour each week and review how they are progressing towards their action plan. Review the business plan monthly with your most senior people. Make changes to the plan (keep your plans in sand) as needed so you can hit your goals (keep your goals in stone).
Very few people take the time and mental discipline to plan. You’ll be ahead of the pack by doing a simple, well thought out plan.
Don’t follow an overcomplicated template that may not suit your business. Instead, use the headings outlined above to ‘think through’ your business improvement plans thoroughly. When you do you’ll have a real plan that reflects your business and where you want to take it this year!
To find out more about my planning advice and planning facilitation, visit this page…
Business Coaching Services Brisbane
Times are tough right now. Small Business Owners are calling on their advisors more than ever. A small business coach holds a special place amongst advisors. These are the people that help you with the detailed strategies related to staff performance, sales increase and lead generation (among others).
Having a small business coach in Brisbane can be a dynamic, profitable and rewarding experience. Unfortunately for every success story, there are a dozen failures.
Here are a few things to consider when looking for business coaching services in Brisbane…
Firstly, is your business coach steeped in practical approaches that work for small business? Or, is your business coach a theorist? There are many who enter the small business coaching field with an MBA or years in senior executive at the big end of town, who struggle to relate to the special needs of a small business in suburban Brisbane.
Secondly, can your business coach sell?
This is essential! You need more sales …simple.
Your business coach needs to be able to school you and your people on every aspect of the sales process.
Thirdly, can your business coach help you to turn your staff into a productive and profitable team? You need to be able to delegate the work that you are currently doing to dedicated and capable team members. The idea is for you to assume a CEO style role in your business. That means that you will be working on strategies to take the business forward and not be consumed with the day-to-day.
Finally, can you work with that coach? If you don’t think you can enjoy the process of developing a business growth plan and then receiving mentoring and guidance on strategy implementation from this person, don’t proceed.
On a positive note, if the four things above fall into place, then you can enjoy a very rewarding working relationship with a business coach.
When you start working with a business coach, the first big hurdle that you should work on with your business coach is how to put more profit in your pocket in less time? That means that you’ll be making more money and spending less time doing the do! Then, you are ripe to scale and expand. Strategies that allow you to make more with less are essential ..e.especially in the current climate (March/April 2020).
For more videos about my business coaching services in Brisbane, click here…
More Praise for How My Business Coaching in Brisbane Has Helped Businesses Like Yours to be More Profitable and Productive!
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If you are looking for a professional, powerful and on point presenter James is as good as we have had.”
“The last email that James wrote for me resulted in $247,000 worth of new opportunities into my sales pipeline… Wow! Another recent strategy James helped me with saw a 100% initial response rate from target Business Owners, a 93% conversion into appointment and over $146,000 in closed business to date with $220,000 remaining the pipeline!”
“Sensational, concise, workable and easy to understand. Definitely a great way to enhance social and communication skills.”