‘Businesses don’t plan to fail, they fail to plan’ is an often cited quotation by Harvey MacKay.
Businesses that fail to plan are likely to be reactive, vulnerable to threats, closed to opportunities and work ‘blind’ with a short-term focus. Indeed creating a business plan is crucial to the success of an organisation.
A business plan is a report of the things that a company plans to do over a particular period of time. It is often used to help secure investment and gain approval from internal and external stakeholders as it will cover the opportunities that the business intends to exploit and outline the resources it needs to do that. It will also contain background information and analysis as to why the company decided on those objectives and strategies.
The key questions that a business plan will answer are:
- Where are we now?
- Where do we want to be?
- How do we get there?
- Are we on course to get there?
To answer these questions a business plan covers the following stages:
- A situational analysis of the internal and external environment. This often includes the use of tools such as PESTLE, SWOT, BCG and Porter’s Five Forces
- The setting of clearly defined, measurable and time specific objectives. This will usually include a mission statement as well as measurable goals such as ‘to increase brand awareness to 75% by the end of 2008′.
- An outline of the strategies that will be used to achieve those objectives. Using the above example to increase brand awareness one strategy could be ‘advertising that keeps the brand top of mind’
- Tactical plans will outline how the strategies will be delivered. Here we might consider a particular combination of TV and radio advertising at peak viewing and listening times
- An implementation plan, with budgets and responsibilities, which will become a working document for day-to-day activities
- Procedures will also be decided upon and put into place for monitoring performance against the objectives. This could involve external customer research to test awareness levels at various points in time throughout the year.
The most effective plans will be regularly updated and refined based on close monitoring of actual results versus the objectives set.
A business plan should be carefully evaluated before any time or money is spent on implementing it. The potential in the plan must be assessed and feedback sought before it is signed off and approved.
The following questions should be answered:
- Are the objectives realistic and achievable?
- Am I convinced that it’s worth investing in this company?
- Are the forecasts believable?
- Will the resources outlined help achieve the goals?
- Is there any evidence that the customer will accept the plan?
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