Unfortunately, some entrepreneurs choose to forego developing business plans when they’re launching a business.
This is understandable as entrepreneurs are often creative big-picture thinkers who want to begin making money chasing leads, creating opportunities, and building connections.
While the above activities are important, if you don’t have a business plan, every opportunity, lead, or connection can look like a good one at the time. Pursuing them all can lead to wasted time and resources and ultimately, hinder the long-term success of your business.
However, even if a business plan does get written, it’s often ineffective at producing results because:
- The plan isn’t actionable – the plan is a collection of market research, statistics, and information on competitors, but this knowledge doesn’t lead to concrete steps the owner needs to take to achieve their business goals.
- The plan is vague – there may be a lot of business jargon and fancy charts, but ultimately the plan doesn’t outline how strategies will be implemented.
- The plan is poorly researched – for a plan to be meaningful and inform decisions, real research must occur. This means talking to potential customers and reading research reports – a Google search won’t cut it.
- It’s missing a financial section – it’s important to develop sales targets and cash projections to set realistic expectations about your revenue and expenses.
The key to developing an actionable business plan is to treat it as a living document that’s part pragmatic projection and part sales tool.
Here are five key tips to help you develop a business plan you’ll follow.
- Start small and informally
Don’t treat your business plan as a chore that must be completed as soon as possible. Adopting this mindset will increase your chances of feeling overwhelmed and you’ll rush to get it done, making the plan less useful.
Instead, reframe how you think about business planning – ask yourself, what can I learn from the business planning process?
Over the course of a week, set aside 1-2 hours a day to think about your:
- Business idea and model;
- Target audience;
- Goals and objectives; and,
- Marketing strategies and tactics
Treating business planning as an iterative process right from the beginning helps you see the business plan for what it should be: an evolving document you’ll continue to come back to and build on.
You may want to try to get your entire business plan onto one page to start to keep things simple. Check out the business model canvas to help get you started.
- Set SMART goals
Your business goals are a key element of your business plan as they’ll impact all other areas of your document. Furthermore, they’ll inform and drive your day-to-day tasks.
If your goals are poorly defined, then they won’t be purposeful, and you’ll have a difficult time developing and implementing the right strategies to achieve them.
To create purposeful goals, you must draft your goals to be specific, measurable, actionable, relevant and timebound – SMART; an example of a SMART goal is:
“I will obtain 50 new clients [measurable] in the consumer discretionary category [relevant] this fiscal year [timebound] by employing a multipronged marketing strategy [actionable] consisting of traditional and digital tactics.” [specific]
SMART goals can guide the rest of your business planning by giving you something tangible to work toward.
- Strike the right balance between strategy and tactics
It’s easy to get hung up on researching your ideal customer, their journey, and the marketing strategies you’ll use to engage them.
While you may correctly identify a social media strategy as the most effective way to engage your audience, you’ll need to dig much deeper into the operational details regarding how to execute the strategy to be successful.
For example, in the case above, you’ll need to setup a website, understand digital analytics tools as well as search engine optimization to execute your strategy. By unpacking the day-to-day work underlying your strategies, operational activities will begin to naturally emerge.
These work plans will be task-driven and identify the things you need to do to accomplish your goals and objectives.
- Throw out the idea of the perfect business plan
You’re never going to be fully informed about your market, target audience, and competitors as business landscapes are constantly changing and evolving.
This means your business plan will be built on assumptions; assumptions are things we presume to be true at a point in time.
Over time, your assumptions will change as you learn new information about your customers and the market your business operates in.
It’s important to identify the key assumptions that your business plan relies on and review them on a regular basis to confirm if they are or are no longer assumptions.
For example, when you first start your business, you might assume that a segment of your target audience prefers your flagship product. However, through online sales and ongoing customer surveys, you discover they prefer a different one. This new information alters your assumptions and impacts how you market to your customers in the future.
Ultimately, assumptions can solve the dilemma about how to manage change over time and help reduce the stress of the unknown.
- Build a roadmap
Your business plan should not only provide you with an overview of your business in the short and long-term, but it should also lay out exactly how you’ll get from one stage to the next. For example, how will you move from the initial start-up and growth stage to the expansion stage?
In other words, your business plan should function as a roadmap for your business and be as specific as possible. Ideally, it should identify key milestones, set major targets, and outline the key steps you need to take to meet these important deadlines and goals.
Successful business planning is about adopting a continuous learning mindset and coming back to your plan on a regular basis to check your progress and update your assumptions. Following the above five tips will help you work more efficiently and effectively, stay motivated, and reduce stress.
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