Business Planning Is Vital To Business Success
Lack of business planning is high up on the list of reasons small businesses fail. In Australia the failure rate for small businesses in their first 5 years is about 75%. This means 3 out of 4 businesses start with all kinds of vision and hope but are not operational after 5 years. The pain associated usually could have been avoided with some attention given to business planning.
Many small business owners begin their business because they have a valuable technical skill. However, making a product or delivering a service is just a small part of establishing and running a business. There are all kinds of things to consider including: marketing and sales, pricing, margins, workflow systems, customer service and after sales, financial systems to monitor cash flow, monitoring competitors, etc. If you start with premises and staff there are a whole range of other issues as well.
The Cost of NOT doing Business Planning includes:
- Unclear priorities – many long hours doing a multitude of tasks without knowing which things are most important
- Constant overwhelm because there are always so many things to do
- Long hours of work by the business owner after business hours which are usually not factored into overheads
- Tiredness, poor eating and lack of exercise
- Loss of family time
- Inefficiency in almost every area
- Unclear goals
- Responding to needs and crises rather than a well thought through plan
The Benefits of Business Planning include:
- Save time (at least a day per week)
- Maximise sales by at least 20% (depends on industry)
- Clear focus of why the business exists and what is your mission
- Clarity around values which helps with so many bigger decisions
- Clarity around goals and plans to achieve your goals
- Understand what it costs to run the business and how many sales you need to make wages, or to make profit
- Have a written guide to help you refocus when you have a bad day
- A plan to help you prioritise activities
- Have clear measures to check your progress
Business Planning is best done Quarterly
The calendar year conveniently falls into 4 quarters of roughly 90 days. Business planning works best with an annual plan framed at the beginning of the year. This written plan should then be monitored and updated each quarter. It should be able to be written out on a single page so it is easy to reference. Daily and weekly steps can be worked out from that as well. This way everything stays on course.
Quarterly Planning Days
If you need assistance with Business Planning, join one of our Quarterly Planning Days . Let’s get you productively planned for your business (and your life). No need to struggle any longer. Click here for details on our upcoming Quarterly Planning Days.
