“Without a destination
a sailor will never get a favorable wind”
Why do you need a business plan?
Setting out on a journey always requires a destination. The same principles apply when you are starting a new business. Without having a specific end goal or destination in mind, you may find yourself lost in the ether.
However, with a vision, and a crystal-clear destination of exactly how your business will look, you will most certainly find yourself moving at lightning speed. Regardless of what mishaps come your way, you will get there eventually.
Having this vision before setting out helps realign your business towards the intended destination as you go along.
At this point, we can all agree the importance of a well sought out business plan. So, let’s explore how to go about setting one up.
A strategic business plan helps identify the strengths and weaknesses and provides the best possible approach to ensure comer.
It further helps in focusing on the business areas most in need of time, resources, and money.
Steps in writing a strategic business plan
- Understand ‘Why’ you started your business. Thousands of businesses start every year; however, they fail within the first two years. This is usually due to not having a clear understanding of why they began in the first place.
- SWOT analysis will help you identify your strengths, weaknesses, opportunities, and threats. This must be done in conjunction with the market you intend to compete in.
- PEST analysis will help in identifying external factors which may affect your business. Understanding the environment around you will help in structuring yourself in the market. (PEST stands for Political, Economical, Social, and Technological)
- Once you understand where you stand internally and externally, it would be wise to understand your competition. Porter’s five forces model helps provide a handy guideline in analysing your competition.
- Identify what success means to you. In five years, time what would success look like to you. Write down a number. This will help you stay motivated and benchmark against your actuals.
- Your vision needs to be crystal clear. Having written this down will help analyse your progress and provide you helpful insights on what needs to be done to stay on track of the vision.
- A written record of how each task needs to be done will help you stay focused and structured and help delegate work when you hire or outsource.
- Financial projections will help you in budgeting and prioritizing the areas of business that need the most support. Having expenses laid out from the get-go will keep your working capital in check and ensure you’re not out of pocket. This will also help you create a plan to achieve that magic number by your fifth year of trading.
- At this stage, it would be wise to write down key performance indicators (KPI) to ensure your business objectives and goals are met. As KPIs can be set for your business’s financial and non-financial factors, they will help ensure all aspects of the business are controlled.
- Finally, a business is forever changing and evolving. To keep up with this, your business plan would need regular updating. Ensuring your business plan changes with time will get you that much closer to your destination.
Business plans are not easy but are worth your time and effort
Business owners who go through this process report a sharp increase in profits and sales revenue than those who lack a strategic plan. In addition, the majority of our clients we surveyed believe that a well-written strategic plan helps them with focus and clarity. This resulted in their business performing at a very high level.
Even though the benefits of a business plan are tremendous, very few business owners ever consider, let alone write a business plan.
If the reason you first started your business is compelling enough, putting in an effort to write a strategic business plan will help you springboard your business towards success. Not only this, but you will be far ahead of your competition.
As you will have a plan and a structure in place, it will help navigate your business through those turbulent waters, ensuring you reach that all-important destination.
EvoTax will happily help you write a business help that will benefit your company long term
If you need further help writing a strategic business plan, call us for a free, no-obligation consultation. We would be happy to help.