Writing and reviewing a business plan: Watch a case study on putting
together a business plan.
Australia is home to many successful small businesses and for a large number
of them, a business plan is an essential part of their everyday operations.
However, we have also seen that there are many businesses that don’t have one.
There is a common saying that a business that fails to plan is one that plans
to fail and this couldn’t be more true, especially in today’s climate which is
providing more challenging business conditions than we have seen in recent
times.
The reason a business plan is so important part is that it provides a good
structure and framework for you to follow. The easiest way to think about it is
having a blueprint or roadmap for your business. It’s about being able to chart
out where you want to be and the steps you need to take in order to get
there.
The question on many businesses lips, however, is how do I get started? So
here are five easy steps to help unlock the potential of your business and get
the new financial year off to a great start.
Step 1: What’s your vision?
The first step is to review your current plan, assuming you have one (if you
don’t, why not check out this section on Better Business which helps you
get started). This is not only to check that you've achieved your goals, but to
ensure that it captures your evolving vision for your business.
That's because a good plan is more than just a budget. It also defines the
things that make your business different and keeps your customers coming back,
especially your unique selling proposition (USP).
You may find that your business model has changed or that your day-to-day
operations have drifted away from your original USP. If so, now is the time to
update your plan and set a clear vision for the future.
Step 2: Set goals
A plan isn't a plan without some concrete goals. But make sure they're
specific, achievable and measurable, then assign clear responsibility to
someone in your team for achieving each one. Create an action plan with
milestones for each step, then regularly follow up to ensure you stay on track.
Remember, what gets measured, gets managed, so have good tracking systems in
place.
Tips
- Update your plan with specific, measurable goals for the year ahead.
- Measure everything about your business, from the number of leads each month
to the profitability of each product you sell.
Step 3: Check your finances
Now you know your goals, you need to make sure you have resources in place
to achieve them. And with the Australian economy still not firing on all
cylinders, it also pays to have a cash reserve ready in case of emergencies.
Start saving some of your excess cash flow, or talk to your bank about an
overdraft or line of credit. Because the best time to talk to your bank is when
your business is performing strongly, not when things are tight.
Tips
- Aim to keep between two and six months expenses in reserve.
- Put finance in place ahead of time, rather than waiting until conditions
tighten.
Step 4: Keep cash flowing
With average payment terms for Australian businesses blowing out to a
three-year high of 55.6 days in the March quarter (according to Dun &
Bradstreet) your business may already be feeling cash flow pressure. And even
if you're not, it's always a good idea to make sure that your cash flow systems
are running at maximum efficiency.
The first step is to create a cash flow forecast, then track incomings and
outgoings scrupulously. Online banking tools can give you an up-to-the-minute
snapshot of your cash position at any time of the day or night. And your
business banker can also help you make sure you're using the best payment and
cash management tools for your business.
Tips
- Create a cash flow forecast and track your cash flow position each
week.
- Review your accounts receivables process. Make sure you’re invoicing
promptly and following up overdue accounts.
- Make it easy for your customers to pay electronically — by BPAY, Direct
Debit, funds transfer, or card. That puts money into your bank account
sooner.
Step 5: Put it into action
With your plan in place, you're ready to act. But don't keep it to yourself.
Tell your vision and your goals to everyone who matters: your staff, your
clients, your suppliers, your banker and your accountant. Write them on the
walls, print them on your mouse pads, sign off your emails with them, until
everyone can repeat them in their sleep. And if circumstances change, don't be
slow to update your plan and your goals — it's a living document.
It’s also important to remember that your business partners, whether it be
your business banker, accountant, lawyer or even sales coach, can be key
sources of important insight when putting together or updating your plan. So
make sure you draw on this expertise to help you pull together a document that
covers all the bases and puts you in a position to do what you do best – run
your business.
