I am amazed at the number of small and medium-sized businesses that do not have written business plans. (It doesn’t have to be a dissertation. It can be a crucial point summary with numbers). To my mind, trying to grow a business without a plan is like trying to play football without goals. It can be entertaining for a while, but you have no idea if you are getting closer or further away from your objectives. Worse still, your employees have no idea where you or the business is going. Written business plans are a statement of clarity of purpose and a public statement of commitment to your stakeholders. At the very least, it holds you accountable to yourself.
In my start-up company, we produced business plans at the beginning of every year since inception, even when it was just one part-timer and me. Of course, we did not always hit our targets. Having a plan meant that we ‘knew’ we were no longer on target during the year. This comparison with the plan allowed us to revise our goals or our strategies in the light of changed market conditions. It also flagged needs to adjust resources, such as funding, staff levels and training, to get back on track.
Perhaps even more important than the plan itself is the process of planning. Correctly done, it engages staff at all levels, ensures that everyone understands what we are trying to achieve and the critical success factors involved. A means that we can plan to avoid any bottlenecks, resource constraints. It also means we understand all the consequences should any essential business variables change, which they always do!
When I worked in Fortune 100 companies, I used to think, ‘If we hit the plan numbers for all the wrong reasons, we are doing well.’ My focus then was too much on the outcome rather than the process. In an SME the planning process is every bit as important as the planned outcomes. It’s the glue that ensures the team functions as one unit.
