© 2013 Elena Fawkner
Very little that is worthwhile in life happens by accident.
Cause and effect dictates that worthwhile results come from
worthwhile efforts and the converse is also true. It's
basic goal-setting theory. Set the goal, put in place
the steps that will eventually lead you there, carry them
out and you will eventually reach your destination. Think
of a business plan as a goal-setting tool for your business.
There are two main purposes for writing a business plan.
The first is to help you to manage your business. The
second is to raise capital. The focus of the business plan
for each purpose is different. In this article, we are
focusing on the business plan as a tool to help you manage
Why Write a Business Plan?
There are many reasons why a business plan is a valuable
tool when it comes to managing your business. Most
fundamentally, it helps you 'set your sail' in the direction
you want your business to go. Rather than drifting along
aimlessly, being tugged this way and that by random currents
and puffs of wind, a business plan helps you steer a
predetermined course and stay on track.
A business plan also facilitates focus. It can help you
keep your attention where it is required ... on those steps
you need to take to bring you closer to your objectives.
This creates a results-oriented mindset which helps break
the inertia that can result from a lack of focus.
The process of creating a business plan can help you to
anticipate hurdles and threats to your business and to
formulate actions to overcome adverse contingencies.
A business plan also serves to keep your business on track
by reinforcing your vision for your business. It acts as
a check and a balance, something against which to weigh
a proposed action. Does the action further the purposes
you have outlined in your business plan? If so, go for it.
If not, it is probably just a distraction.
Things to Think About In Your Business Plan
A good starting point to begin thinking about the elements
of your business plan is to carry out a SWOT analysis (what
are your business's strengths, weaknesses, opportunities
The strengths you identify will become the foundation for
your competitive focus. You want to think of ways to exploit
your strengths here as these are what will set you apart
from your competition. For example, you may be particularly
good with people. Use this talent in the customer service
aspects of your business to distinguish yourself from your
competition who may be lacking in this area.
By identifying weaknesses, you can plan for ways to compensate
for them. For example, you may be in a business where you have
to wait for some time to be paid by your clients and as a result
you may be vulnerable to cash flow shortfalls from time to time.
By recognizing this potential weakness in your business, you
can take steps to minimize cash flow difficulties by arranging
for an overdraft facility with your bank. Or introducing an
incentive for clients to pay you earlier such as an early
The opportunities you identify become the cornerstones for
your business development. What opportunities exist that you
can exploit in the next 12 months to develop your business?
Think here in terms of things like technological advances
that you are in a position to exploit but your competition is
not, possible joint venture partnerships, or the exclusive
rights to XYZ patent that you have negotiated.
Finally, the threats you identify become the foundation for
your contingency planning. By recognizing the threats that
exist to the future health of your business before they
become a reality, the better placed you will be to implement
contingency plans in case the worst happens and the better
prepared you will be to ride out the storm.
Deciding on Your Plan
Once armed with your SWOT inventory you can begin to
refine your thinking in terms of coming up with an overall
strategy for your business. Remember, you want to exploit
your strengths and opportunities and minimize the impact of
your weaknesses and threats.
Once you have your overall business strategy in front of you,
you are then in a position to reformulate the elements of your
SWOT analysis into specific goals and objectives. Write
objectives to support every goal for every area of your
business. Think about your products and services, customers,
competition, image, customer service, marketing and advertising,
financial objectives and the like. For example, one of your
goals may be to introduce a second or a third product line
in the coming twelve months; or to launch a new advertising
campaign or to negotiate a more favorable line of credit with
By the time you are done, you will be very clear in your
own mind where you want your business to go and what you
need to do to get there. In turn, this awareness will help you
to recognize new opportunities as they present themselves.
Finally, bear in mind that a business plan is just that, a
plan. It is not carved in stone and, as with any plan, be
prepared to be flexible and make changes as circumstances and
priorities change. Work with your business plan and treat
it as a living, breathing, organic part of your business. By
constantly keeping your plan in mind when making business
decisions you can rest comfortably, knowing you are steering
your business in the direction YOU want it to go.
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Elena Fawkner is editor of Home-Based Business Online.
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Thursday, 09-Apr-2020 17:29:35 CDT