“With careful and detailed planning, one can win; with careless and less detailed planning, one cannot win.
How much more certain is defeat if one does not plan at all! From the way planning is done beforehand, we can predict victory or defeat.” Sun Tzu The Art of War c 400 BC.
Plan to succeed
Planning is at the heart of good management and can guide you through your business decisions.
A business plan should answer three questions:
Where are we now?
Where do we want to be?
How will we get there?
The plan may cover a small part of your business, for example the marketing effort or the whole business. The plan maybe for yourself to use as a guide and a measure of progress or it could be a document to present to the bank in support of a loan application. The plan could cover the next six months or five years but no matter how much of your business your plan covers or who it is aimed at, plans need to be used; they do not help if they are prepared in minute detail and then lie forgotton at the back of a cupboard.
10 steps to a successful business plan
There are 10 key steps which relate to the 3 main questions: Parts 1-3 all describe “where are we now?” Part 4 describes “where do we want to be?” and the remaining parts 5-10 describe “how will we get there?”:
- Define and describe your business activities
- Describe the current status of the business
- Describe your market, competitors, customers, suppliers and market positioning
- Define your objectives, i.e. where do we want to be?
- Develop a stategy for achieving your objectives. Ask some good questions to get to the best solution
- Identify the risks and rewards
- Develop a plan for dealing with the risks and exploiting the opportunities
- Refine your plans into more detailed action plans
- Do the financials, forecast the costs, revenues and cash flow
- Prepare the final version of your business plan.
One further vital planning step not to be forgotten – use it!
And remember some sound advice from Pooh bear, “When you are a Bear of Very Little Brain, and you Think of Things, you find sometimes that a Thing which seemed very Thingish inside you is quite different when it gets out into the open and has other people looking at it” The House at Pooh Corner A. A. Milne.
So let other people review and provide input to your plans, it is better to listen and reject their ideas than never hear the idea at all.
This is the first of a series of posts on drawing up a business plan.
If you need help in building your business plan then Clearways Accountants can help you with templates, guidance and financial input; just call us on 01737 244298.