Ask a mentor – business planning

A business plan creates a focal point to enable your business to move forward. It is a decision-making tool (does this decision help me achieve my 5-year plan?) and it is a roadmap of achieving what you want from your business. Without a plan, you are flying blind and have no strategic pathway.

The business plan template and the financial plan template on Business Queensland are good starting points, but use them as a guide into developing your own. Do not be afraid to change some things around. As long as you cover all of the points which will help your business to move forward, it will be a valuable plan.

I worked with a client who had grown quickly but did not have a plan. As such, their systems and processes were not well organised as they were implemented to meet the need—they were not very productive because of that and were losing money for every sale.

The business owner was not aware of the financial position, they had big dreams and no way of getting there. I worked with them to get clarity on their strategic direction, and then created an achievable plan to support them in their progress. They have now over $1 million in revenue (and growing) and have around 20% profit. They were also able to take a holiday for the first time since they opened the business.

Write a plan for the audience. The business plan you write to manage the business, is different from the one for the bank (for example). A good plan will give you a destination and will provide you with a guide on how to get there, how to grow, how to reduce risk and provide opportunities. Keeping an eye on the achievement of your plan is paramount. Do not write it and put it in a drawer—use it every day/week/month to support your decision making and to ensure you are continually on the right path.

As in life, as it is in business, being in as much control as you can of your destination is essential. A SMART (specific, measurable, achievable, relevant, timed) business plan with clarity of goals will give you comfort, guidance and a reference upon which your success can be judged, and where you and others who can help you adjust those plans, can do so much easier.

I was asked by small leasing business to develop their 3-year business plan that would give them huge growth. I started with an analysis of what the business does and 'why' they want to grow. This is more than a SWOT analysis, but a deep dive into the motivation of the owners. It was soon clear that they had differing visions and needs and were unwilling to invest cash equally in growth. Further analysis revealed that their assumptions of their financial strength was totally wrong. So, the business plan ended up being a 'back to basics' rescue plan which allowed them to shrink and then to grow again—which they did. This was a great example of 'why' a plan must be built on great foundations and not sand.

I believe that 'planning' is only valuable when based on knowledge and deep, honest dialogue. It cannot be just template based. 'Why' is as valuable as 'how' when developing a business plan. Strategy [to address goals] must be agile and each plan has to be true to the culture of the owners. A wordy plan that the business owners refer to once every 6 months is a waste of time—we must keep the plan alive and adapt it in real time.

Your business plan is your most essential business management tool. Business planning takes you through your thinking, where you are now, where you want to be and how you are going to get there. Business planning identifies and clarifies, analyses situations, develops strategies and gets you clear and focused on what and how you need to do things.

I often find that many businesses that have been operating for a while, that come to me, don't have a clearly focused vision, brand or planned strategies with smart goals and actions. They may have written a business plan a while ago, but they didn't realise the value in the plan they wrote. They didn't develop clear strategies and actions that related to their day-to-day decisions and what it meant to their day-to-day work.

When I work with a business, I review market and industry research and analyse their current situation and develop their strategies for 5 or so areas of their business with sets of action for the next 12 months.

1. Master your mindset.
2. Have a clear and focused vision and brand.
3. Know your relationships.
4. Create excellent systems.
5. Monitor and control your outcomes.

Ideally, a business plan should guide the business and inform about the business. Practically, it can support loan, grant and tender applications. In my experience, business plans are often under-utilised in tendering by many businesses.

I’d recommend a range of resources on the Business Queensland website, including:

• the business plan template
• business continuity planning
• risk management.

Look at some short business planning videos on YouTube or LinkedIn Learning. Register for a free M4G session and have a mentor critique your business plan. Or talk to your Chamber of Commerce for feedback.