Effective business planning

Jul 09, 2018
Business plans are a strategic asset for any business, but not all firms have one. Here are five steps to help you put a comprehensive plan in place.

BY GARRY DOYLE

Business plans are a vital cog in the eco-system of any business. They set the direction for the business and, if communicated properly, instil in staff the desired culture and organised nature of the business. Business plans are also a critical aspect of the funding application process.

Give that they communicate to both employees and external stakeholders, business plans are clearly a vital ingredient for success – but not every business has one. To establish an effective business plan, follow these five steps:

1. Study the marketplace

One of the reasons many start-ups fail is because there is insufficient demand for the service or product on offer. Before drafting a business plan, analyse the market and identify any gaps that might exist. The importance of market research cannot be understated.

2. Innovate

Differentiate yourself from your competitors. Design something that is new or provide your product or service in a way that delivers better value than your competitors. Be creative in the process, as this will – to a large degree – dictate how successful you will be in penetrating your target market.

3. Build a clear vision

Know where you want your business to be within specific timeframes. Set clear objectives – these could include environmental sustainability objectives, profit objectives or market share objectives – and ensure that these objectives are realistic and attainable within the stated timeframe.

4. Communicate the vision

Invest time in ensuring that everybody within your organisation is engaged and understands the business vision. Communication is vital in this process. Seek feedback from those ‘on the ground’ as well as those at the top of the business hierarchy, as they all have different perspectives on what is impacting the business. This will help you create a business plan that everybody can work execute with togetherness.

5. Continually update the plan

Finally, and perhaps most importantly, the business plan must be constantly updated and reviewed over the period of its existence. Circumstances beyond the firm’s control change often and it is therefore impractical to adhere to a solitary, rigid plan that may have been created five years earlier. To achieve success, business plans must therefore be continually adjusted to navigate the macro- and micro-economic obstacles the firm will inevitably endure.

Take your time. Establish a business plan that is strategic, measurable, achievable, realistic and timely (SMART) and which takes into account all the strengths, opportunities, weaknesses and threats facing the business. But most importantly, don’t leave it on a shelf to gather dust.

Garry Doyle is Senior Manager in the Audit & Advisory department at Baker Tilly Hughes Blake.