Many business owners decided to start their own business because they were good at their job and wanted the chance to turn their passion into profit. The freedom, flexibility and satisfaction that can come with running your own business is certainly very appealing.
But what many of these business owners forget is that being good at your job is only half of what it takes to have a successful business. The other half is actually running the business, and this is where so many business owners struggle. Many of the skills required to successfully run a business are not skills people always learn as employees.
Many business owners open the doors to their new business and are so busy doing their job that they forget they need to set a path for the business to travel on. They don’t know (or again, forget) that they need to make sure the business has funding in place so that it can grow, and that they should be using certain metrics to benchmark their progress against.
Countless businesses have failed even though they had plenty of income. They failed not because they weren’t busy, but because they were not managing their business well.
The solution? Every business owner, no matter how big or small, should start each financial year with a good business plan.
What is a business plan?
A business plan is there to set realistic and measurable goals, not only for the business but for the owner as well.
It will set clear strategies on how to achieve those goals and look at the opportunities and vulnerabilities of the business so that action can be taken before the business is impacted.
5 Tips to a Great Business Plan
Key Performance Indicators (KPI’s)
Your business plan should set your revenue targets and the key performance indicators (KPI’s) that you will use to compare what you want to achieve with what you actually achieve. Your budget versus your actual results.
Keep it to one page
The problem with most business plans is that they are 15 to 20 pages long, so it is no wonder that most business owners relegate them to the bottom draw of the desk never to be seen again.
The new one-page business plans that are used by modern accounting firms are much more user-friendly and provide a concise overview of the business for the next 12 months.
These easy-to-read documents summarise on a high level the strategy that the business will use to reach their goals and vision.
Identify opportunities
An effective business plan will look at the business from the outside, identify opportunities for growth and the resources needed for that growth. It will provide clarity on the things that need to be implemented to capitalise on those opportunities to ensure the business continues to thrive.
Identify vulnerabilities
What keeps you up at night? How much is your business impacting your family life? In what key areas are you vulnerable to your competitors? These questions should all be addressed in your business plan and strategies put in place to take control of these vulnerabilities.
Stops procrastination
One of the biggest issues for small business owners is procrastination. The need to work in their business is the driving force and often that means that the working on their business is neglected. Too often business owners tell themselves that they will take action as soon as they get through this little hump or as soon as they get some more time. Someday soon often becomes someday never.
A business plan will hold you accountable to your goals ensuring that never again will your business be put second.
And remember, that a business plan should grow and evolve along with your business, to help you adapt as your business changes and stay focused on where you are heading.
