Business Plans – When to have one

A business plan identifies the uniqueness and purpose of a corporate body and sets out its strategic intent for how it will achieve its charter. They put flesh on the bones of a business entity in a written record, whether it be for an internal or external audience.

www.business.gov.au  defines business plans as:

A business plan is a documented set of business goals, objectives, target market information and financial forecasts that you are aiming to achieve over a certain period of time. It is important to prepare a business plan when starting or growing your business and review it regularly to keep it up to date.

The interesting question about business plans is how they are used once created. By definition a business plan is a document of intent (a plan is defined as ‘a detailed proposal for doing or achieving something’ – https://en.oxforddictionaries.com) and in theory a living document. Because they are an essential tool for starting a business or for getting a business loan it is hard to imagine an organisation could be without one. But having brought one into existence to achieve an initial goal how often are business plan then left in a file, perhaps not seen again until an annual review – if at all?

Businesses carry on and even flourish without further reference to an initial business plan, however here are some tips on how you may benefit from making yours a living and useful document.

  1. Include realistic goal-based outcomes for developing your business or achieving results.

Include timeframes for these and mark them in your calendar, in-tray, or daily tasks work sheets. Too often statements of intent or goals in business plans become items to address ‘when we have time’ or at the next planning meeting. This delays the development of important ideas and improvements from occurring, if they are addressed at all.

  1. Report against business plan objectives at governance meetings.

Report on tangible efforts/results of business activity, projects and initiatives as spelled out in business plans. Include these in your monthly reporting to your governance team for discussion at these meetings.  Discuss this activity with your management team or general workforce in order to keep work activity meaningful, focused, and productive.

  1. Reinforce the separation between governance and service delivery.

Boards spend an essential amount of on-going training and education on what governance is and how Boards operate – their roles, meeting procedures, decision making, legal accountability, etc. Part of governance training is the separation of service delivery/business activity, from oversight activity, compliance and performance management. Clearly setting out activities that a CEO/business manager is responsible for can assist in delineating their role and responsibilities and reinforcing this separation from governance in an ongoing basis.

  1. Use it externally as a tool for growth.

Earlier on I used the common example of developing a business plan for the initial purpose of getting a business loan, as banks require this document for loan application processes. Extend this function for usage when wanting to attract like-minded organisations for the purpose of forming business partnerships; applying for grants; attracting investors; marketing your business, etc. A business plan can serve a purpose for both internal and external use, and using it externally can fly the flag for your business, announcing who you are and what you do in order to expand your horizons.

  1. Use it as a business benchmark.

Good business plans make statements (usually early in the document) of the values that they aspire to in the way they go about their business. Few businesses (I’m thinking mainly community and not for profit here) have a mission, mission or values statement that talk about wealth creation for the organisation. They often have to do with more benevolent purposes. Even banks and wealth generating businesses (for clients or shareholders) hitch their values/missions on people and communities.

Use the Values, Vision and Mission statements in your business plan as benchmarks for new business ventures or the trajectory of your current business developments. Simple questions that refer back to these such as ‘Is this business activity/direction in line with our charter/values/vision?’  are important for maintaining the integrity, direction, and focus of your organisation.

And finally,

  1. Set times to formally review your business plan.

Revisit and tweak your business plan as often as is practical – but no more than quarterly; otherwise the ever-changing document will become fickle and meaningless. Set review times in a calendar. Keep the document relevant, updated, and fresh.

 

Below are links to information on business plans and templates:

Business.gov.au has useful and thorough information. The business plan template in this site is comprehensive:

https://www.business.gov.au/info/plan-and-start/develop-your-business-plans/writing-a-business-plan

Bank websites have useful and free templates available – I have seen this one from the ANZ used by a community sector organisation and is very helpful, but investigate others:

https://thesbhub.com.au/tools-and-templates/business-plan-template#.WsxKQohubIU

 

Manuel Duharte

Consultant