Small Business

Almost every small business client I meet is reluctant to commit to completing a strategic business plan for their business operation - yet it is one of the single, most important activities you can do for your fledgling business. When I ask small business owners about the status of their business planning activities, the conversation usually goes something like this: Karen Paiyo (Business Counsellor): Have you completed a strategic business plan? Business Owner: Well, no, I know exactly what I want my business to do, I don't have to write it down. Things change so fast anyway that it would have to be updated every five minutes and I don't really have the time to do one because I am up to my neck with other things and they take ages to do. I will have to write pages and pages and I don't really know how to do one and I am not really a good writer and they are way too expensive to pay for one to be written and besides no-one really reads them anyway and it will just end up sitting on a shelf somewhere collecting dust. Even worse, what if my competitor gets their hands on the information some how? They will have all of my business secrets right there in their hands! I think it is a sure bet that this conversation is being played out between advisors and business owners around the world. Research has indicated that fewer than 25 percent of businesses actually complete a business plan and of those that do, less than half actually continue to refer to the document after it has been completed and fewer still actually apply the strategies outlined in the plan. I think you get the picture. There are a million reasons business owners use to justify their chosing not to undertake the completion of a business plan for their venture. I would like to challenge this view by offering some compelling reasons as to why a strategic business planning is essential for every enterprise. Getting Intimate With Your Business The first key benefit relates to the actual process of completing the plan. Owners who have completed their own business plan become intimate with every aspect of their business. The market research gives them the context within which their business operates. It provides detail and hard facts about the degree of competition and the issues facing your industry. In essence, it forces business owners to remove the rose-coloured glasses and face the harsh realities before them. Assessing Reality, Planning and Articulating Your Strategy The business planning process also forces them to assess every aspect of the business, the good, the bad and the ugly, and demands that the business owner, in light of the information they have unearthed, develop a well structured and articulated approach as to how they are going to press forward. It forces them to know each of its strengths and how to play to them and to become familiar with the weaknesses and how to plan on ways to improve on them. It addresses the business risks and forces you to identify and plan mitigation strategies to minimise them. It also assist in the identification of opportunities you may not otherwise have seen. khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji khabarkhaleeji Facing the Financials It makes you answer the all important question about money. Specifically, about how much you will need, for which purpose and when. It also forces you to address the key question of where it is coming from and how much you expect to make and when so you know how long it will take before you are expected to breakeven and when borrowed funds are to be returned. Effective Stakeholder Communications Vehicle The second benefit is you have a key document for communication purposes. Every time you discuss your business needs with stakeholders you are going to have to communicate who and what your business is, its history, business goals and clearly articulate your strategy for achieving those goals. This includes asking your bank manager or investors for funding, staff who will need to get up to speed quickly and be able to buy into your vision and to rally their activities around your business goals, as well as third-party service providers, such as graphic designers who will need to know your business in order to help you create your image and brand. Your Business GPS Another key benefit is that it acts as your touchstone and your compass. When you are buried in the day-to-day activities of operating your business it is often difficult to remember exactly where it is you are headed and what it is you are trying to achieve. Your business plan is your reminder and re-visiting your strategic business goals can help you re-focus, re-task and re-allocate your resources to get your business back on track - ensuring you achieve your goals that much sooner. Articulates a Shared Vision A strategic business plan articulates your vision and your goals. Research has shown that businesses who have a shared vision are more likely to grow net profits at exponential rate. Notably, Net Income for those with a shared business vision increased by a whopping 756% compared to a paltry 1% on average for those without. A shared business vision creates a focus for each of your stakeholders and has them operating in concert with the shared vision. Combined with an appropriately aligned mission statement and goals and you have an effective framework for all decisions within the business, the end result is that all stakeholders are moving forward in unison and reaching your goals and fulfilling your strategic intent that much faster. Your First Business Test Think of the business planning process as bit of a test of your entrepreneurial determination, an indicator as to how far you are prepared to go to achieve your dream of owning your own business. There are no guarantees in business and overnight success is often the result of many years of struggle and sacrifice. Seeing how you step up to this challenge is an excellent way to determine if you have what it takes to be a successful entrepreneur. Karen L. Paiyo is an Australian Small Business Counsellor, supporting and nurturing the spirit of entrepreneurship in the Asia Pacific Region. Karen empowers small business owners by transferring to them the skills and expertise needed to help them take their business ideas from creative concept to profitable reality, faster and with less risk.