Business Planning for Small Organisations; is it Worth it?
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Running any business takes a huge amount of time and energy, but for smaller businesses, this can often be even more consuming as personal passions and finances are firmly intertwined. This often means that small organisations don’t take the time to focus on planning or strategy and many small business owners aren’t sure of the benefits, are wary of the time it might take and are unsure as to how they should conduct a business plan. This isn’t unique to small businesses as many larger organisations only create a formal plan when they are refinancing or seeking new ownership but in all cases, they are missing out on a truly beneficial exercise.
Business planning is often seen as a paper exercise done for the purpose of executives in boardrooms and therefore not relevant to everyone else. However, being able to create and deliver a business plan is relevant to everyone, whether in business or not. Essentially a business plan is simply a process of setting the goals for the business and laying out how these are going to be achieved and this practice can and should be carried out across many people's particular focus;
Starting out in a new business whether a ‘lifestyle’ or commercial business e.g. A yoga instructor wanting to launch their own studio
Launching a new product or concept in an existing business
Deciding to change careers or take a career break
Pursuing higher education
Raising funding for any of the reasons above e.g. A small business owner wanting to expand into new premises or increase marketing spend to help them grow their business
And of course regular business planning within an existing business
Business planning does not need to be complex or time-consuming and should be a regular exercise conducted by all businesses to take a look at their strategy. So how should you go about it? There is not a one size fits all approach when it comes to tackling this task however that allows each individual business or person to tailor their approach to their unique needs. The definition of a business plan keeps it clear and concise; ‘A Business Plan is a formal statement of business goals, why they are attainable and plans for reaching them’. The vast majority of business plans would cover similar areas in some form and the level of detail to which the plan dives would depend on the size and scale of your organisation or reason for business planning. The points below summarise the main focus areas of most business plans:
Defining the goals and the opportunities you see
Determining how these will be achieved
Understanding what might stand in your way; competitors, funding, people and other risks etc
Identifying what you need to make this happen which can include pricing, product, marketing, money
Ensuring your financial position is clear to make your goals a reality
By going through this process and covering all the relevant areas, business plans help owners, managers and individuals to look objectively and dispassionately at their businesses. They help communicate to your team, customers, and backers, who you are, what you do and what you need to be successful. Often the act of conducting a business plan can help you make changes to your business that will positively help your growth and can also sometimes help make difficult decisions regarding the viability of the business. Business planning isn't just a paper exercise, nor should it be a one-off but it is something vital for businesses of all sizes to carry out.