Having a plan at the outset is important to any new business owner, whatever the size of the company.
It’s like the old adage: failing to plan is planning to fail.
The pace of change in business is so fast now that unless you have a plan and a focus on executing the plan, you will simply be caught up and overtaken by competitors much quicker than a generation ago, according to Paul McPadden, National Managing Partner of KPMG Private Enterprise.
Paul oversees KPMG’s work with small and medium enterprises, from start-up companies to large family owned businesses.
“Mapping out a plan,” he says, “allows you to understand what it is you are offering, who your target market is, and from there you can set financial goals.” In such a dynamic and fast changing market as the one many businesses operate in today, a plan is also a useful tool in deciding what your organisation won’t do as much as deciding what it will do.
The best plans are simple and measurable and as your business grows your plan will change. Paul suggests these five keys can help you build a business plan.
Focus on growth: Don’t just survive, look at ways to prosper.
KPMG sees a lot of business owners who don’t have a plan effectively stumble along, week by week, month by month; the focus is on survival rather than making the most of the business.
A plan should include growth measures, expected return on investment, and sales targets along with other considerations specific for your business.
That’s really important because if you are investing your own capital or borrowing from the bank you want to know that you are getting a good return and to track progress.
SWOT: Know your Strengths, Weaknesses, Opportunities and Threats.
Understanding and being honest at what you are good and not so good at is important to give you a realistic view of your opportunity and the gaps you need to be aware of.
Identifying those gaps can help you in recruiting staff. It also lets you assess the size of the opportunity, who your competition is, and what threats there are to you.
Execution is as important as planning: You are responsible for bringing the plan to life.
Sharing your business plan with staff can help in goal setting and ensuring everyone understands what it is you are trying to achieve in the business.
There should be a clear enough link between your strategy on paper and daily implementation that you understand what is critical to supporting your goals and can prioritise accordingly.
Revisit and revise: At least once a year give the business plan a complete refresh and makeover.
There is no point in having a plan if you are going to put it in a drawer and only look at every now and then.
It’s really important that you sit down at least once a quarter and look at the goals and measures and objectives, and track how you’re going.
Learn from the best: As a business owner you should lift your head up occasionally from the day-to-day work and look at what is happening in the market and economy.
Industry events, conferences, and training seminars can be really helpful.
Having a business mentor is a good idea, particularly if you’re starting out. You can get assistance from agencies like local councils, chambers of commerce, New Zealand Trade and Enterprise and Callaghan Innovation.
You can also look at having an advisory board where you and some experienced business people meet once a quarter to set goals to achieve, helping take the business forward.
Want to know more?
Here’s some helpful information on starting and maintaining a business plan.