It amazes me how many businesses operate without a plan. It’s very rare that I speak to the owner of a business with less than 25 staff and find that they do have a plan. Interestingly most will tell me that they want to have a plan, but list all the excuses as to why they currently haven’t – as if they were just about to do it.
But there are also a lot of business owners who will argue against having a plan. Usually their main argument is that “my industry changes too fast!”, so what’s the point having a plan when things change before the plan’s finished?
Well, here’s one very good reason to have a business plan: Owners with business plans enjoy 30% faster growth than those without a business plan.
That’s why the majority of larger businesses – and 71% of the fastest-growing companies – always have a plan. Whether it’s a good plan and whether it’s followed are different matters, but they always have a plan.
By the time a business has 25 staff, things just become chaos without a plan, and usually by this point someone has pointed out the need and got on with planning. As the old saying (attributed to Benjamin Franklin) goes, ‘failing to plan is planning to fail’.
Why don’t small businesses plan?
Here are some of the reasons I’m usually given:
- We don’t have time for planning
- Things change too fast
- I have a plan, it’s in my head
- Having a plan is too restrictive and we like to be opportunistic
I suspect there are other reasons too, but just a bit too embarrassing to admit:
- Many small business owners have never been taught how to plan
- Planning feels like hard work and there’s always something more interesting
- Until they’ve had a good plan, they don’t know what they’re missing
4 reasons why businesses need a plan
1. Think of a business plan as a roadmap. It will guide you as you navigate the decisions and hurdles that lay ahead as your business grows.
2. Creating a business plan helps you define and set your objectives so you can measure your progress against your long-term business goals
3. If you’re looking to raise funding, a business plan can help to persuade potential investors that you have a long-term vision for financial success
4. Risk is an inevitable part of business, but a business plan can help to reduce the risk factor by providing a template for considered decision-making
Business plans drive growth
When I persuade a business owner and their team to create a plan, it is without any doubt the single biggest factor in driving them forward with accelerated growth.
When you have a plan:
- You can see where you’re going and what’s important to get there
- You can prioritise the tasks that will bring you closer to your goal
With a plan on paper, the whole team can share the same common goals. If goals are only verbalised, everyone can interpret them differently.
That’s why my clients say how liberating it feels to have a plan. The change in them and the business is often dramatic and exciting!
What does a good plan look like?
The good news is there’s no one size fits all approach to business planning. As long as it covers your business goals, objectives, and pathway to business growth you’re increasing your chances of success.
Whether you choose to plan using graphs, Gantt charts, or short lists, be sure to keep it simple. Plus, if you keep a summary of your plan on the wall it will act as a constant reminder and keep everyone in your business focused and aligned.
Planning for tomorrow
As well as planning for the future, you can also plan for tomorrow by ending each day by writing your to-do list for the following day.
Not only will listing tomorrow’s tasks help you to hit the ground running and prioritise your time each morning, but it’s also a great way to embed planning as a regular habit.
The bottom line is if you want to achieve growth more quickly – and make your life easier – then you should make creating a plan your biggest priority.