Business plans are crucial if a new business wants to be prepared for the future and make sure it doesn’t run into mistakes that are otherwise avoidable.
But there’s no sense in simply writing a business plan and leaving it on the shelf to gather dust. In fact, there’s nothing stopping you from revising it and setting in place a strategy for the next two to five years.
SmartCompany spoke to two experts in the field for their advice on how to make your business plan the best it can be:
Kylee Valentine, from Crowe Horwath’s business advisory team in Brisbane, told SmartCompany successful small business owners have a clear strategy in mind for their company. The tricky part is articulating these plans and getting them down on paper.
“When you look at the very successful businesses, they’ve absolutely spent that time looking at where they are now, where they want to be and how they’re going to achieve that goal,” she says.
Valentine says she enjoys the process of sitting down with someone and workshopping their business idea because SME operators have a lot of passion but not necessarily a lot of spare time to evaluate all of their ideas themselves.
“As a small business person you wear so many hats,” she says. “You are the one doing a lot of the hands-on stuff so you don’t get a chance to step back and look at it from a strategic point of view. That’s an ingredient to success.”
The key thing, Valentine says, is to consider both your business’s opportunities and threats. Conducting a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is the best way to do this.
“I think it’s more about the planning and then the implementation than necessarily the final document,” she says. “That process of sitting down and thinking about your business – this is what it looks like now, what do I want to look like in five or ten years’ time?”
While business plans typically follow similar structures – a mission statement, industry background and a financial plan among other sections – Valentine says the end result should reflect the business owner’s preferred style and vision.
“I think the structure of the business plan has to suit the business owner’s style,” she says. “Some people will love the detail of a 50-page plan and that will absolutely work for them. Others will want a two-page summary.”
Andy Sheats is the founder of insurance website health.com.au. Despite only being two years old, his business provides more than 80,000 Australians with private health insurance and turned over $85 million in the 2013-14 financial year.
Sheats says a large part of his company’s success was the way it used an agile methodology and put the customer first – something that wouldn’t have been possible without a flexible business plan.
“Too often it is 50 pages about the industry and team,” he says. “I would focus more on the plan – what are you going to do?”
His advice to fellow business owners is to be concise.
“Be clear on your long-term objective so you know what you are aiming to achieve,” he says. “Be very specific about the stuff you have to do right away, and increasingly less so as you get further into the future.”
Sheats says the reason for wanting an adaptable document is that you want your plan to become better as time goes on.
“Nimble and flexible is important, but open-minded is an absolute necessity. If you are not open minded you may not have the opportunity to learn, and therefore take advantage of the potential for flexibility.”
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Broede Carmody is a former senior SmartCompany reporter. Before this, he was a co-editor of RMIT University’s student magazine Catalyst.
