I am amazed at the number of small and medium sized businesses who do not have written business plans. (It doesn’t have to be a dissertation it can be a key 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 objective and a public statement of commitment to your stakeholders. At the very least, it holds you accountable to yourself.
In my company, we have produced business plans at the beginning of every year since inception, when it was just me and one part-timer. Of course we do not always hit our targets but importantly we ‘know’ we are no longer on target during the year, and this gives us the opportunity to ‘revise our plans in the light of changed market conditions’ or to adjust other resources, such as funding options, staff levels etc. to try to get back on track.
Perhaps even more important than the plan itself is the process of planning. Properly done, it engages staff at all levels, ensures that we ALL understand what we are trying to achieve and the key success factors and measures required. This means that we plan in advance to avoid any bottlenecks, resource constraints etc. It also means we understand all the consequences should some of the many variables of business change, which they always do!
When I worked in Fortune 100 companies, I used to think ‘If we hit the numbers for all the wrong reasons then we are doing well.’ My focus then was too much on the outcome rather than the process. In a 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.