Do I even need a plan?
It is pertinent to first debunk some myths and deal with the question of whether you need a plan in the first place. For example, you may be “boot-strapping” a new start-up business, and your business idea may still be fluid and in a validation phase. In this situation, a comprehensive formal business plan is likely to feel inappropriate and overwhelming.
Equally, it may be surprising to hear but it is not always critical for raising investment or finance either, although it would provide an extremely useful supporting document and you will need to provide some of the elements of a typical business plan anyhow. Moreover, not doing this work may mean that you mis-calculate your funding requirements and is likely to reduce your chances of success.
One of the key facets of a Business Plan is that it provides a structured process that helps you to step back and evaluate where you are, where you want to get to and the most effective route. If you were planning a long car journey to somewhere new, you would not just jump in a car and start driving without first consulting a map or Sat Nav and probably checking your tyres, water, petrol and thinking about any provisions, tolls, stop offs etc. Similarly with your business, taking some time out to think about what you are doing and how you could best develop your business and even do things differently will save you time and money and minimise the chance of having to back-track!
Furthermore, the great news is that a Business Plan does not need to be “as thick as a doorstep”; it can even be done on one page in a few hours! Read on to find out more…
Business Plan Canvass
A Business Plan Canvass is a modern, visual template that you can use to creatively map out how your business operates and to consider new ways of developing your business model. Unlike a traditional business plan which can be quite bulky and time-consuming, this template captures everything on one page and is a great way to reflect on the key pillars of your business, without getting lost in the detail. Thus, it could be regarded as a strategic management tool that can be used to illustrate what your future business model could look like, without going into exactly how that will be achieved.
Innovation Canvass
The Innovation Canvass was developed in recent years by Innovate UK and is a similar style of (one-page) template but focussed on businesses looking to launch a new product or service. It was predominantly developed for existing companies that have already started the process, but it can still be used as a checklist for businesses even at the idea stage. The tool is centred around Capability, Offer and Opportunity on the premise that a combination of all three factors are the key determinants for success. Each section is broken down further into sub-sections and scored accordingly to provide a snapshot of the current position and to highlight any gaps. It then evolves into a plan for prioritising actions that will ensure these pillars of success are put into place.
Although, this template has some limitations, it is an excellent tool especially for innovative organisations that are looking for an adaptable means of creating and developing their business plan. The one-page templates are also an excellent and convenient way of sharing and developing the company vision with stakeholders in the business, including your external Advisors, ensuring everybody is clear on the main priorities and are pulling in the same direction.
Mind Maps
Another alternative if you prefer to work off a “blank canvass” is to create your own Mind Map. This can be done either on paper or by utilising software which can often be downloaded for free or for a trial period. This is an excellent way to get a lot of information onto one page in a semi-structured way. Unlike the Canvass options, there is no framework to ensure that you have covered everything, but this does offer additional flexibility.
Traditional Business Plan
So, is there still a place for the stereotypical Business Plan? The answer is absolutely! This is still a comprehensive way to capture the key considerations and assumptions that will affect the direction and future development of your business. Some of the tools typically used therein such as a SWOT and PEST analysis and the Boston and Ansoff Matrix are still incredibly valuable in helping the planning process. Collating detailed research and thought on areas such as the market, competition, trends, and the anticipated development of the business can help you to see the bigger picture and guard again short-termism, i.e., going from A to B is always done with one eye on C and D.
Financial Forecasts
The financial forecasts that accompany a traditional Business Plan can also be incredibly powerful and the benefits they bestow should be embraced. This can be a real challenge for a surprising number of business owners, who might shy away from “the figures” and rely almost exclusively on their Accountant and historical data contained within their yearly accounts. The main problem with this approach is that they will be out of date by the time they are received and analysed. . Using a good forecasting template (whether produced manually or within a digital system) will allow you to proactively manage your business, by drilling down on your sales and cost predictions and comparing these figures against your actual performance (usually on a quarterly basis).
Whilst plans can change and you may pivot the direction of the business, this discipline will enable you to develop a deeper understanding of your business model and provide an increased level of accountability for achieving your goals. You will then also be able to adeptly model your future growth and development, so for example, you can then work out exactly the right time to take on a new member of staff or move into new offices. Often the business cannot afford to do everything at once, so getting on top of your finances allows you to see the opportunity costs and dependencies in advance, which leads to better decision-making, i.e., what to do when, whilst maintaining cash flow and improving future profitability. In a sense, financial forecasts are a kind of business plan unto themselves and unlocking this potential is a key ingredient of becoming a successful business owner.
Summary
In conclusion, doing some business planning is crucial, but do consider which template might work best for you and your business growth stage. Adapt the template you choose if necessary and if it is for internal use, don’t be afraid to get creative. There are some simplified traditional style templates that are only 5-10 pages long that are still quite useful and thought provoking. Equally, it works for some people to mix and match, perhaps going into more depth and doing your initial research using a traditional style template when you are preparing to launch your business and then utilising a one-page template to test and adapt your approach.
Sharing your thinking with your whole team to get buy-in and help further development is a valuable step that is often missed out. Remember though that business planning is a cyclical process and the principle of Plan, Do, Check, Act applies, so continually review and revisit your business plan to ensure that it remains current and relevant, or it will become obsolete.
With the amount of disruption that has taken place in the last 12 months, it is highly likely that now is the perfect time to review your existing business plan or create a new one. Whichever template option you elect to go for, it is highly recommended that you consult an external Advisor or Mentor that has some relevant experience in your sector. There will be opportunities and risks that you simply overlook or under-estimate and whatever you plan to do will nearly always take longer than expected. With 50% of businesses failing in the first 5 years, this extra level of challenge, scrutiny and support can often be the difference between success and failure.
Hopefully this summary proves useful and that it inspires more business owners to re-think their approach to business planning. For more information about support services for business planning, coaching or funding please contact me at miked@empircipartners.com or visit; https://empiricpartners.com/our-business-services/