By Guy Rigby, Head of Entrepreneurs at Smith & Williamson

“Passion and drive make an entrepreneur. The very last thing you want to do is to write a business plan,” says Bill Morrow, founder of Angels Den, “but it’s an important process.”

And it is. Over the years I have witnessed many examples of potentially great ideas falling by the wayside through the lack of a coherent plan or roadmap. I have seen businesses start up and spend significant sums, only to find that insufficient research had been carried out and their business model was fundamentally flawed.

So barring the odd ‘no brainer’, the general rule is that if you fail to plan, you plan to fail. Apart from anything else, this is because a properly executed business-planning process will make you consider a host of issues that might otherwise slip under the radar.

Contrary to some entrepreneurial thinking, planning need not dampen drive or hamper creativity or passion. Indeed, planning can be an illuminating and inspiring part of the business-building process, as research leads to new ideas and, occasionally, that elusive eureka moment!

Jane Khedair, author of Successful Business Plans and founder and MD of Business Plan Services, believes that business plans are a fundamental part of the management process: “It brings a management team round a table and gets them talking. It helps them understand where they’ve come from, assess where they’re going and how they’re going to get there. It enables them to identify opportunities and strengths, which can then be built upon.”

Business planning is not only good for the management team. Once complete, the key elements of the plan can be communicated and shared with all of the staff in the business. This will help instil a sense of purpose and engender loyalty to the cause, perhaps even passion!

Another powerful reason for having a business plan is that it creates a stake in the ground and a roadmap which gives guidance and can be followed. If you choose to take an alternative route, which from time to time will be both inevitable and desirable, the business plan will be there to remind you that you are changing your approach. It will prompt you to evaluate and justify your actions. Without a plan, many businesses simply drift from one unfocused activity to another, not really understanding what they are doing and why.

Fortunately, a carefully researched roadmap can provide focus, prevent business drift and reduce risk. It will help entrepreneurs and their teams to prioritise, set and achieve their goals.

But what about flexibility? What if you need to change your plan?

Business plans should not be written and put in the bottom drawer. They are living documents that need reviewing and updating on a regular basis, enabling you to focus on the right priorities at the right time and moving each area and function of your business towards your chosen goals.

For help with your business planning process, contact Guy Rigby on 020 7131 8213 or email guy.rigby@smith.williamson.co.uk

By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.

Smith & Williamson LLP
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