When most managers and entrepreneurs hear of a business plan they imagine writing a complicated and jam-packed document that is meant to waste valuable time when they can actually do things that generate revenue and results.
This is one of the common misconception that deprives so many companies of a planned development given the fact that entrepreneurs forget the fact that the main purpose of the business plan is not to impress others, but to help them manage the business better, to prepare them and the business to face change and to offer them a big picture over the progress registered.
To keep things clear and simple, we’ve comprised a list of the most important 4 stages in planning a business that your company needs to go through whether you intend to write your business plan or not.
First or all, set a strategy!
Establish what you plan on doing, with whom and how. Adapt your products/services in accordance with your strengths and weaknesses, opportunities and threats, with what you can do best and with the expectations of your potential clients. Focus on a target market and on delivering a specific, clearly defined product or service.
For this you don’t need to create a jam-packed document, nicely formatted, unless you have to present it to potential investors.
If that is not the case, make sure you’ve written the key aspects of the business. They will prove their utility later on. They have to be written down because one of the biggest temptations in the business world is to start diversifying and trying to do everything, losing sight of the established objectives and the things that actually matter. In this particular stage, the main objective is FOCUS.
Don’t start from the premise that what you initially established will be set in stone. One of the paradoxes of strategies is that, on one hand, a strategy must be subsequently applied during a long period of time to see results, and, on the other hand, maintaining a strategy that does not produce the expected results will do more bad to your business than good. Therefore, having a flexible strategy is equally as important as adapting to the actions taken in accordance with the market trends.
Create an action plan!
The action plan refers to the concrete and specific measures that lead to the accomplishment of objectives established in the strategy. Again, the most important aspect doesn’t refer to the way you present the document but rather to the fact that you have created it and that you will give 110 percent to honor your commitments:
- Establish a schedule for recurrent review of the plan. Hold periodical meetings with the parties directly involved in the planning activity (weekly, monthly) to go over the plan, the obtained results and the problems that appeared along the way to take the measures and actions necessary to solve them. During these meetings the involved parties will evaluate whether the actions previously taken have produced the expected results and if changes or improvements need to be made in order to achieve the estimated results.
- Create a list of initial potential scenarios. Creating a list of potential scenarios is essential because one of the first things that need to be done during the meetings mentioned above is to analyze these scenarios and determine whether major changes have occurred. Modifying these scenarios is a sign that other aspects of the initial plan need to be modified as well. In most cases, these scenarios are created based on the instinct of the entrepreneur, on what the members of company think or on the external information that has not been put into practice. Thus, they are tested and validated only within the market.
- Establish some benchmarks. They are as follows: specific data, deadlines, responsibilities known by all parties involved in the process. Create a list for every important activity that contains: the name of the person responsible, deadlines and the costs, and in the case of activities that bring revenue, include profit estimations. Based on these reference points you will be able to determine if the estimated results were accurate or not.
- Include accurate and real numbers. You cannot create a plan without having accurate data to portray the obtained progress. Sales forecasts, cash flow, production costs, various expenses, estimated profits and others fit into this category. All this data is considered planning documents and not accounting ones so you need easy to use templates. Alongside the accounting aspects, accurate measurement units need to be included so that you are able to evaluate the obtained results depending on the field in which the business activates: the number of units sold, the number of collaboration propositions received, the number of clicks, the number of unique visits, the number of sent emails, etc. This way, these estimated numbers will be compared with the real ones at different preset time intervals.
All these aspects need to be present not to impress others, but to offer both you and your company the right direction to make sure you keep an accurate balance of the evolution of the company.
Now that you have a plan, make sure you use it as a management tool meant to help you develop your business. Make sure you don’t stray from periodically revising the plan and that you adapt all your activities in accordance with the results you obtained.