Just wing it right? More established businesses than you think are lacking a clear business plan because they feel like they don’t need one anymore. Expert startup and scale-up advisor, Kate Methuen-Ley, shares why established businesses need to maintain a business plan to ensure their company doesn’t fall by the wayside.
What is a business plan?
Earlier this week, Kate Methuen-Ley ran a session on how to write a business plan to improve your small business, hosted by SalesForce for The Great British Entrepreneur Awards. Here she dives further into the importance of honing your business plan depending on the size of your company, and what to include and what to leave out. Here she dives further into the importance of honing your business plan, depending on the size of your company,
“A business plan is a written document that describes in detail how a business defines its objectives and how it is to go about achieving its goals.”
Benefits of a business plan
Kate identifies these main advantages of maintaining a business plan for your company:
1. Helps you grow faster
Studies prove that you grow 30% faster with a business plan. This study was based on the aggregated business growth of 11,046 companies, which found that those that planned ahead had better growth. Even more, the study found that business plans actually benefitted established companies more than they did start-ups.
2. Minimises risks
While putting a business plan together, you’ve probably identified a number of risks. In addition, the process can help you plan ahead if you take that risk.
3. Creates focus and direction
It’s very easy to get lost in the noise and chaos of growing a business. How many orders did we get in today? How do we engage our customers? A business plan really helps you drown out that noise and focus on what’s going to actually grow your business. Instead of panicking, you can refer to the plan.
4. Gives you the agility to be proactive with challenges and opportunities
Business plans aren’t rigid and unchangeable. Things happen that you can’t predict. If you have a plan in place, it is easier to interrogate it and amend it if you have an unexpected challenge or opportunity.
5. Supports access to loans, grants, finance and investment
By 21 March 2021, the Coronavirus Business Interruption Loans Scheme (CBILS), the Coronavirus Larger Business Interruption Loans Scheme (CLBILS)
and the Bounce Back Loans Scheme (BBLS) had disbursed over £75 billion through loans and similar facilities. In fact, BBLS accounted for almost 94% of loans made and 62% of funds disbursed. This wouldn’t have been possible if you didn’t have a robust business plan in place. Institutions will want to see a well thought-out and validated plan.
6. Gives you confidence
When putting together your business plan you will have spent time researching, validating and analysing your business. This can help know that you’re on the right track and build confidence.
7. Gives you a playbook or operating guide
A business plan helps you to remember to do things – leaving your brainpower to work on what will drive your company forward.
8. Gives you the opportunity to think of new ideas
While you’re doing your research for the plan you are likely to also be giving yourself the right stimulus to think creatively.
9. Helps you create an action plan
It makes it much clearer to identify what works for your business and what doesn’t.
10. And if you fall down a drain…
It means that someone can come and support you because what they need to know is in one place.
How to create a business plan
Kate tells us the things to keep in mind when creating your business plan:
1. A business plan should aim to give a good outline of your company, your business strategy, your action plan, your targets and how you’re going to meet them.
2. Most importantly, just do it! Don’t wait until you have to.
3. You want to keep it simple. It can just be a few pages of bullet-point lists, tables, and essential projections, particularly if it’s an internal document.
4. Keep it specific. Don’t have vague goals like, ‘be the best’ or ‘world leading’. Use specific dates, management responsibilities, budget and milestones.
5. Be focused. Keep priorities to a minimum, be realistic in what you can achieve and what those priorities will achieve for the business.
6. Cash is king. Keep a beady eye on your cash flow.
7. Be agile. The business plan is not set in stone. Regularly review and revise it.
Startup v. Growth Business
Looking for sustainable growth or are scaling the size of your business up, or both.
Goals & Objectives
Opening up new revenue streams or markets, or growing the ones you are already in.
Managing costs, being efficient and effective.
Business Plan Audience
An internal ‘playbook’ or manual for the year.
About the successful execution of the plan, and creating efficiency and effectiveness around that.
An established business is in a much better position to plan based on experience and previous history.
There are lots of templates out there – but the basics are the same whatever your business stage.
Before you start writing it, be clear about:
- Who your audience is – is it internal, is it the external e.g. the bank?
- What’s the objective? Is it for annual planning? Are you planning on scaling or raising investment, or changing direction?
- Don’t forget to identify points where you’ll review the plan.
Do a SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats.
A good way to make sure you’re writing an effective business plan is through:
- Strengths describe what your business excels at.
- Weaknesses are what stop your business from performing at its optimum level.
- Opportunities are favourable external factors that could improve performance.
- Threats refer to factors that have the potential to harm your business performance.
What headings should I use within the business plan?
A) Executive Summary
- Description of the business, vision and mission.
- Key objectives and targets.
B) Business Description – what you do
- Add in your strengths and weaknesses here.
- Your products and services
- Operational Structure – how you do it.
- Business model and pricing structure.
C) Market Strategies
- Sales Channels.
- Marketing Plan.
D) Competitor and Market Analysis
- This is where you talk about your opportunities and threats.
E) Development Plan – how you are going to change or improve what you currently do to meet your targets?
- Products and Services.
- Operations and Management.
- People and Places.
- Analysis & Planning.
To learn more about how to effectively write a business plan, check out Kate’s video here: