Business is a long term journey, filled with multiple layers, many facets, and requiring several skills. And any journey is most likely to succeed if it is planned in detail, well and truly before it begins. Ironically, despite the fact that business is a significant financial, mental, and emotional risk for most entrepreneurs, it is often commenced with little or no effective planning. The outcome: as many as 90% of small to medium (SME) businesses shut their doors.
When I was an accountant and business advisor, I would see the pattern repeat time and time again. Excited and energy-filled clients coming in to request that I set up their business trading structure. They have the idea, the belief, and the passion. They are certain their product or service will sell. And fast forward 24 months, they are back in front of me with money, energy, and passion spent.
Here’s the issue readers, as Zig Ziglar said, if you aim at nothing, you will hit it every time. Sadly, planning is not sexy!! And moreover, for many budding business minds, planning is an unknown element. And the average SME commences through the technical knowledge of a particular skill related to a product or service. And more often, the business skill is yet to be developed by the budding entrepreneur.
If I said to every entrepreneur that they should pause, and complete a business degree (3 years), they would all tell me to go jump. Therefore that isn’t a realistic approach. Instead, let me suggest that your likelihood of success can be increased from 10% to 70% if you do three things;
1. Create a business plan
2. Focus on working ON rather than IN the business
3. Have a mentor or coach, who can be objective(likely not family or friends), and who has walked the walk of business success
These are 3 fundamentals, and there are many others, but at least just do these 3. And your chances of success will significantly increase!
In this blog (which is in two parts), I’d like to focus on the first element, the business plan. This singular piece of work contains your entire belief system about your business. It is effectively your dream put down in writing. And one way to ensure that a dream comes true is to write it down. Because those written words become a reality. That reality passes forward in time and doesn’t get lost. Just think how successful The Bible has been! Would Christianity have endured without that book?
There is a lot of literature about business plans, therefore it isn’t hard for you to find a list of contents to include in yours. In this blog, I’m going to share my view on the essential parts of the plan.
The 5 main categories I ask my clients to focus on are;
1. The Business WHY (Vision)
2. The Business WHAT (Mission)
3. The Business WHO (Stakeholders)
4. The Business HOW (Processes)
5. The Business WHEN (Forecasts)
These 5 categories represent the macro essence of your business. They encapsulate the entire journey, philosophy, technical elements, and human side. Therefore as a starting point, simply answer those 5 questions of why, what, who, how, and when in one paragraph. That will be the basic charter of your business.
And within these five broad categories, I will break down the further parts that an entrepreneur should document before commencing the (ad)venture. This will all be in PART 2 of this blog.
As an end note, aside from the fact that a business plan creates focus, which is essential for success, it also creates your first business asset. The intellectual property you create in your business has value. Plans, protocols, manuals, checklists, processes, flow charts, etc. are highly valued by astute investors and buyers. And the banks love to see them when you are seeking finance! And that’s what differentiates the average small business from the larger more successful enterprises.
Please send us a message with your email address and business details and we’ll send part 2 of the business planning blog through to you right away.