Business Planning – is it important?
Business Planning is a critical part of doing business but is very often underrated.
How many times do we hear people say, I don’t need a plan, I know what I am doing. Or even, What’s the point, things change and you can’t plan for what you don’t know. Business Planning seems cumbersome and without proper understanding or commitment, is generally not done well. And when not properly implemented is not effective. This leads many business owners to run their business moment to moment, often fire-fighting and reacting to the unexpected.
Experts argue that planning is effective, “A business plan is also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road. The time you spend making your business plan thorough and accurate, and keeping it up-to-date, is an investment that pays big dividends in the long term” (Enterpreneur.com, 2020).
96% of businesses are failing… and this could be the reason why.
No one in the construction industy would start to build a house without a plan or just ‘see how it goes’, or a pilot get into a plane without a clear destination, route and shedule. But yet, many business owners don’t seek the same clarity over where they are, where they are going, how they are performing.
Often, business owners are so busy working in the business, taking time out to work on the business seems like a luxury they don’t have. But without it, they end up doing more of the same . Without lifting their head to check the direction of travel, they don’t see the speed bumps in the road and can’t do anything about them until it is too late. Business owners can get frustrated without proper planning and end up wasting time or resources on issues that could be avoided. Many believe that a successful entrepreneurial spirt requires a fast pace and constant drive forward. But slowing down to plan isn’t just good business. It could be the difference between experiencing a steady upward trajectory or having a sputtering, haphazard road forward.
Start up Business Planning
We have met many business owners who had a business plan to meet the needs of the bank when first setting up. These plans are often very detailed and comprehensive. Typically they include a business summary, marketing strategy, competitor analysis, operational and management plan not to mention detailed financial reports. The level of detail allows owners and investors to analyse the data and predict whether or not the business will achieve success.
And yet, these are often filed away and never reviewed, revised or even read!
A business plan should be a live document. It should consider the longer terms direction as well as the shorter-term operational goals. Regular and more short-term planning cycles allows a business to not only respond more effectively to external and internal changes but be more proactive, adjust and change rather than just react to situations.
COVID 19 Pandemic
This past year and the effects of the COVID 19 Pandemic have demonstrated this perfectly. Most businesses started 2020 with an optimistic outlook. When the Pandemic hit, all the plans for 2020 were dramatically altered within a matter of days. Over the course of 6-8 weeks businesses were scaling back, shutting down or ramping up operations to meet new demands. Those that had a good handle of their business had vital information at their fingertips. They were able to take measured actions to pivot and shift resources, capital, and employees as needed. And as the ever-changing circumstances arose.
If an owner develops a healthy and productive planning process for their business, they have this vital information at their fingertips at anytime. They can jump into action, based on data, facts and historical information. Without a regular and consistent pattern of planning, business owners are starting from behind from the outset. They can only ever run a business moment to moment and be reactionary.
To plan means having a purpose in mind.
You would never take a trip without at least knowing where you were going? Planning for a business is much the same. If you have ideas of where you business should be or where you want your business to be, then planning is a must. Remember, tactics and strategies can change. You can deploy resources differently or allocate them in a new ways to meet market conditions, but you should never abandon your plans of being bigger, better and stronger. Only with a road map, a chart, a course can you stay on track and achieve the business goals you want
How can we help?
At ActionCOACH we establish regular planning cycles with all our clients at our 90 day GrowthCLUB. Planning should be an organic part of your business, instead of a one-off event. It sheds light on what could be possible and new opportunities not otherwise considered. Business Planning takes away the haphazard approach of reacting to whatever life throws at you. Instead, it assists you to take the ideas that are currently in your head and develop them. A step-by-step, practical, relevant plan will ensure more measured success.
If planning isn’t something you do regularly, find out how it can transform your business. Join us at our next GrowthCLUB on Monday 29th March. Planning sessions are held each quarter. Contact us to book a place on the next session.Book a call