Some sort of business plan is essential for a successful business. You may muddle by without a business plan but will not achieve as much as you could have or should have. In other words, without a plan, you will “lack the ability to do something successfully or as it should be done” – the definition of incompetence!
A business plan gives an outline of your business, the market in which it will operate and how it aims to achieve success. It will cover areas such as your target market and profitability. You should be concise but be specific about how you will deliver the plan.
Not only will your business plan be incredibly useful when it comes to securing loans and investment, it will also be a personal tool to help you understand your objectives.
Your business plan should start with the end in mind. What do you want your business to look like in 5 or 10 years’ time? What will the turnover be? How much profit will you be making? And so on. Then you can work back to establish what you need to achieve each year to reach that target.
It follows that you need to set yourself goals both for the business and for you personally. These goals must be written down and they should be SMART i.e.
S - Specific
M - Measurable
A - Awesome
R - Realistic
T – Timed
For example, a personal goal may be:
S - I want to retire with £300,000
M- Do you have £300,000 in your retirement pot?
A - The prospect of retiring with that amount of money should inspire you to do it.
R - £300,000 should be achievable whereas, say, £10 million might not.
T – In 5 years’ time or by a set date.
An example of a business goal would be to grow sales by 100% over the next three years.
Once you have all of your goals written out you then need to identify for each one:
- The “pain” that you and those you love will experience if you don’t achieve your goal.
- What you will gain when you succeed.
So, for the personal example above, the pain may be poverty and ill health and the gain may be wealth, good health and a prosperous retirement.
Finally, you should identify the key things you will need in order to achieve your goal. For example, it could be new resources, contacts, skills, or actions.When you have completed this process for every single goal you would like to achieve, you should review them and decide which are the most important to you, which are less important and which (if any) are, on reflection, not important after all.