It’s Time To Revisit Your Business Plan
New year, new goals, new resolutions to forget by Feb 😉 We love the few weeks post-Christmas where everyone takes a breather and often, we’re lucky enough to ease back into work without the usual hustle that the rest of the year holds. It’s the perfect time to do some ‘what’s next’ thinking for your business. If you don’t have a business plan, then you definitely need to read on. If you do have a plan, it’s time to update it. They’re meant to be evolving documents that get a brush up every 6 – 12 months!
What’s the purpose of a business plan?
Putting pen to paper (or keyboard to screen) does a lot of good things for your business but in our opinion, the most important purpose is that it allows you to make good decisions. Business owners make decisions – big and small – constantly throughout the day. The big ones can have even bigger implications on business success and having a great accountant *cough* to help you get across the numbers when considering options and having a plan that outlines goals and vision and where you want to be in the future means that decision making is significantly easier. Making big calls on a whim spells disaster and the approach you take can be the difference between a short lived or a future proofed business.
What should be in a business plan?
A business plan should encompass the key areas that will help you do things like raise capital, inform decisions as per above and keep you on track to reaching whatever it is you want to reach. Don’t stick to rules in the plan, touch on areas of importance in the scheme of your unique business and cover things you know are crucial to success in your industry.
Having said that, there are certainly sections that every business plan should cover.
To get the ball rolling (particularly if strategy and/or writing isn’t your usual jam), start with a one pager. It should summarise the most important parts of why your business exists and how it’s going to operate:
- What problem are you solving?
- How are you solving it?
- An overview of your target market
- Your key competitors
- Your competitive advantage
- Where’s the money coming from?
- What are your sales channels?
- Basic financial projections
- Your milestones or big hairy goals over the first 1-3 years
Here’s another reason to create a business plan: if you can’t answer the above points pretty easily, you may need to rethink the business idea. It’s continually surprising to us when we sit down in strategy meetings and clients often can’t outline their target market (or go the opposite way and say all of Australia), or their competitive advantage. These things must be clear if you have a shot at succeeding in the long run.
Ready to take it up a notch? Here are some more areas to add and expand on when you’re ready for more than one page:
- Target market: this needs to be detailed. Outline the basic demographics but go deeper than that; how do they make purchase decisions? What do they value? Where are they online? What do they care about practically? These questions really are the foundation to every other piece of your business puzzle as the answers tell you the marketing channels you need to be on, the copywriting that needs to be written for your website, which suppliers and vendors you’ll want relationships with, product design… the list goes on
- SWOT analysis: if you did a commerce or marketing degree then you’ve definitely heard this term too many times. But it’s harped on about for a reason; understanding the strengths, weaknesses, opportunities and threats for your industry as a whole, and then for your competitors and your own brand, is invaluable. Identifying opportunities is where a great business idea stems from. If you analyse too many threats for comfort, how you can change that to decrease risk? Furthermore, what are your competitors doing really well? This can serve as inspiration or at least as a great research exercise for you
- Marketing and sales: a marketing strategy should be its own separate piece of work however the broader strokes should be in your business plan. How will you find customers? How will you convert them? What will your conversion rate be? What are your sales forecasts and goals?
- Milestones: what are your goals and the key steps needed to make those happen? You should cover both easy-to-tick-off short term goals and longer term, aspirational (but somewhat realistic) goals too. What does success in the first 3, 6, 18 months look like? This doesn’t have to be a monetary figure either
- Responsibilities: who is in your team, and what is their role? Which goals or sections of the business plan are they responsible for, and how will they be kept accountable?
- Finances: this is a big one and you’ll often need a hand from someone who knows numbers if they aren’t your forte. Demonstrating how you’ll fund the business is paramount for obvious reasons. Forecasting and budgeting comes next. Get those spreadsheets happening people!
How should you go about updating your business plan?
Pivoting might be the word of 2021… and if nothing else, it taught us that to survive, businesses have to be constantly evolving and adapting to whatever’s happening in the industry – whether that’s a huge curve ball or a slow and steady change that’s easy to predict.
We’re all on the same page: if your business isn’t evolving, it’s dying. If it’s not growing, it’s shrinking (growth doesn’t only mean team size or revenue). So as you make these changes, your business plan needs updating. Seems simple but we reckon most of you haven’t opened the business plan document in quiiiite a while 😉 To make it easier, here are some questions to ask yourself when you find the time to update:
- Has your target marketing changed in any way? For instance, their online habits may have evolved as new apps or features get released. Does TikTok need to be added to your channels?
- Has your product or service changed, even slightly? Chances are high considering it’s near impossible to nail this from day one. You should’ve learnt some things along the way that’s improved your offering. Take on feedback, look for repeat purchases. How can you make it better?
- Have some new competitors entered the game? What do they do well and/or poorly? Have some existing competitors either dropped out, or do they need a refreshed SWOT analysis?
- How’s the budget and forecast going? Without a doubt, this will need an update
- Has your team changed? Are responsibilities different? Now that roles will have been more fleshed out, you’ll have new detail to add in this section
- How are those goals and milestones looking? What have and haven’t you achieved, and why? Have you got some new ones to add to the list, or existing ones that no longer feel relevant?
Nomatter your business size or your industry, a great business plan means you’re setting yourself up for success, early on. There’s no point in it being completed, closed and living in a Sharepoint folder somewhere though. Use it! Circulate it internally, print it out. Refer back to it when you have decisions to make throughout the day. It’ll keep you on track, accountable, and will hopefully make your business owning job a bit easier.
Need a hand with your business plan, or resetting financial goals for 2022? You know where to find us.