Despite the fact that this month’s column is about ‘Business Planning”, don’t be disappointed when you discover that I’m not going to give you a blow by blow description of how to write a business plan, what information to include in it and how to make it look pretty. If that’s what you want, there are text books galore, software packages and workshops available, as well as an abundance of web sites (complete with templates) that can assist you in that regard (and practically do the plan for you).
Writing a business plan isn’t everybody’s idea of fun and as such, business plans have probably had their fair share of bad press. When a ‘business plan’ is seemingly the only thing standing between you and the fantastic new business you so desperately want to buy (that of course you know will be a winner), and the bank manager won’t give you the money until you’ve done one, it can seem to be a right pain!
Business Plans can range from simple, basic and to the point (a ‘quick and dirty’), through to well thought-out detailed documents. You can either do it yourself or pay somebody else to do it for you. Often people tend to get so caught up in what font to use, developing their vision and mission statements, or which photos to put on the cover, and in doing so, lose sight of the real purpose of the document, and knowing what that is, should the most vital first step for the business.
We are often asked to help people to write a business plan and our first question is usually, why do you want one? The answer is often - ‘because we thought we needed one’. You really need to know why, and for whom you are preparing the business plan - the answer to this will help determine the content, layout and detail required. Whilst everyone uses the title, business plan, everyone means something different. What the bank wants will be different from what the government wants, from what a major creditor wants, to what a board of directors want. You need to ask them what sort of information they are looking for in a business plan and deliver that. Often people ask for a business plan when what they really want is a feasibility study - you really need to know what you want or face the risk of doing a lot of work only to find that your document does not do the job you need it to. This is where you may need to obtain professional advice.
Beware of people who prepare business plans using standard templates - that is, hard copy or electronic documents that require you to put the information in at the top and the business plan falls out the bottom. The problem with this is that your adviser will not understand your business; you will not understand your business and your business plan will look and read the same as everyone else who has used the same template. This is an opportunity to show how your business is different from your competitors - not the same. The readers of your plan are looking for the unique factors of your business that will be of commercial use to them and may ensure your long term viability - only you can indicate this - not a template!
This document is exactly what it says - it’s a plan for your business and it’s only going to be as good as the information that goes into it. So instead of worrying about the colour, font and paragraph layout - think practically about these types of things:
Unfortunately, no matter which style and size of plan you use, whether you use it in the course of your business is up to you but as is often the case, unless it is relevant and useful to you, it is very likely to end up in the bottom drawer of the desk or gathering dust on the bookshelf.
If you’re not going to properly research the content of your business plan and then integrate it into your organisation’s operations and review and re-visit it regularly, then maybe you are better off just doing the quick and dirty version and save yourself time and money.
The hard bit, but in many ways the most interesting part to writing a business plan, is gathering up all the information and doing all the research to tell the story that you wish to tell - that is, how you are going to go about developing and building your business idea. It’s hard, because nobody else is going to do it for you (unless you pay them, and still there is some information that only you will ever know). But surely, part of the enjoyment should be in doing the research - finding out where your customers are going to come from, how many of them and exactly what products and services they are going to want from you; Looking ahead to see where you are going to be in 5 years - isn’t that an exciting prospect to consider, as well as to aim for? And if that doesn’t ‘float your boat’, how about the prospect of making money - as much money as you decide you want to make? Much of it is about ownership and managing your own destiny and if it’s your business and your money - it’s often a good idea to have a plan for it.
President Dwight Eisenhower said, “I have always found that plans are useless, but planning is indispensable” and this is the key - the process of doing the market and customer research, number-crunching, and considering all the options and future opportunities will teach you more about the business than simply doing a ‘quick and dirty’ or, paying a consultant to actually write your business plan for you.
On the other hand, if you do find the idea of writing a business plan somewhat daunting; have a go first, do what you can and then talk with a business adviser. There are free services available through the State government funded Enterprise Centre program in all areas of Tasmania or talk with your accountant or other adviser.