North East LEP Business Growth Director, Colin Bell, gives his top strategies for successful business planning.
If I was to earn a pound for each time I got caught up in a debate about the need to write a business plan I would be a very rich man. I absolutely agree that a business should know where it’s heading, and know what it needs to get there, and this helps with strategic planning and developing the systems and processes needed to achieve the goals. But – I think when it comes to successful business planning, simplicity is key. A beautifully printed and bound plan might look good on your coffee table, but if you can’t simply articulate the plan then the chances are it will be hard to reach your goals.
Here are a few principles I’ve learned along that way that may help you to develop a plan that works for you and they people you need to invest and deliver it.
1. Focus and alignment
You can’t be all things to all people. It’s easy to fall into the trap of being constantly busy but never really moving your business forward. Being caught in this trap is often a result of any of three things:
1. Not planning for growth – resulting in the owner manager ‘doing’ everything. Their personal capacity therefore becomes a major barrier to growth
2. Trying to do too much – spreading intellectual and physical resources too thinly so they don’t have a significant impact in any area
3. Not having the necessary courage or conviction – To get the best out of finite resources means making difficult decisions. Getting old ideas out of your head can be one of the biggest barriers to creativity – stop hanging on and focus on the ‘vital few’ opportunities.
The strategic pyramid is a great way of making sure that the resources identified in your business plan are directly aligned to the achievement of a focused set of goals and vision. It helps you to interrogate every task, every action, every meeting, everything against the key question – is this helping me achieve my goals? If the answer is no – don’t do it.
2. Dig deep for that elusive proposition
Why should I buy from you rather than your competitors? This is a critical question and one that any funder will want to know; it’s what makes you competitive. Don’t fall into the trap of listing all the things that you expect people want to hear, such as ‘we deliver a quality product’ or ‘we offer a personal service’. Customer expectations have risen dramatically and these are now basic expectations. You need to dig deep and develop a value proposition that is ‘truly’ different and better than the competition. Get this right and you are on the road to success.
3. Accessing Finance? Make the executive summary exciting
Although an executive summary doesn’t sound that exciting, it should be! If you are developing a business plan to access funding, assume that the reader will not look beyond the executive summary. If it doesn’t grab their attention then you’ve lost the opportunity. Think about the rest of the plan as an annex the reader will refer to in search of evidence to substantiate the claims made in the summary.
4. Speak the language of the receiver
It may sound obvious but understanding the audience for your plan is critical. If it’s an internal plan then it needs to be simple and action focused, if it’s to access funding it’s got to excite and grab the attention of the reader while proving that the plan can be delivered. For the purpose of accessing finance your plan must:
• Present the opportunity,
• Present the ‘killer’ facts,
• Provide proof that it can be delivered.
• Demonstrate that you can pull it off
This is about demonstrating that you are business savvy; you understand business models, have a creative and innovative strategy and have the necessary action mechanisms in place (e.g. a project or operational plan, effective leadership etc.).
5. Get the numbers right! You’ve got to win minds as well as hearts!
So you’ve written a great plan, done your research, developed a compelling and superior value proposition, a fantastic product and got the funder’s full attention. How many times have we seen this scenario on Dragons’ Den, the pitcher’s passion has won the dragons’ hearts, only for them to get torn to shreds because they don’t have a full appreciation for their numbers. A business plan must capture minds, so get your numbers right or the plan will be discredited.
6. It’s ALIVE
And finally, you’ve put lots of work into the development of your plan so don’t let it gather dust. Success is attributed to 5% planning and 95% effort; so use your plan as a mechanism for action. Bring it to life, build it into a project plan, assign responsibility and ownership across your business, make it timed and track progress against goals and vision.
Implemented correctly a well-formulated plan will raise the energy levels and motivation across your business and engender a culture of creativity and innovation.