Introduction to business planning

Business planning involves setting a clear roadmap for your business goals and outlining strategies to achieve them. Ongoing monitoring is also crucial to ensure you stay on track towards your objectives.

It’s essential for every business to have a business plan, regardless of whether it’s a one-person, part-time operation, or a large corporation. Engaging in regular business planning enables you to:

• map out your goals and the route to achieve them
• develop a business that aligns with your lifestyle and personal goals
• assess your current skill set and identify areas for improvement
• identify opportunities that can help you achieve your end goal
• manage your resources effectively as a lack of planning can result in wasting time, money, and energy
• make informed decisions when new opportunities arise, rejecting those that don’t match your goals.

Carlos Chambers and his team had a vision for software to streamline the process of accountants receiving information from different programs of their clients before launching Common Ledger. They spent six months conversing with accountants in New Zealand and Australia to comprehend their prospective market and improve their product.

“We found out that accountants all over the world were encountering this significant problem. That’s what we were seeking – a massive problem, a vast opportunity, and a tremendous way to help advance this industry.”

Their subsequent move was to establish an 18-month plan and a three-to-five-year strategy to transform their startup into a fully operational company. They have now raised more than $1 million and released their product in both countries.

“We are nearing our targets for our initial forecasts. We have recruited the appropriate board members and team members. These achievements are probably the outcome of extensive planning. If we had not completed that six months of research initially, we would never have been able to efficiently create our plan.”

A business plan can contain various components, which may include:

• a brief summary of your business – name, revenue, products or services offered, key partners, and goals
• a market overview – details on your customers, industry, target market size, and potential international markets
• a marketing strategy – how you plan to attract and retain customers, including the costs involved
• an analysis of your competitors – a comparison of your strengths and weaknesses and your unique selling points
• financial projections – revenue, costs, growth rates, and metrics for success
• your team – employee skills, your skills, your mentors or advisors
• operations – including IT, systems, and compliance.

Business finance: An introduction

What you need to know about exporting

• Schedule a regular time for business planning in your calendar to track progress effectively.
• Establish short-term, mid-term, and long-term goals to help you comprehend the milestones you need to achieve.
• Conduct your business planning outside your usual workplace as it can put you in a different mindset and allow you to gain a new perspective.

It can be beneficial to include your team in the process of business planning, but it is crucial not to pass on the responsibility of planning to them. It is important for the owner or manager to be involved in establishing the direction of the business.

Here are some common mistakes to avoid in business planning:

• Focusing too much on day-to-day operations and neglecting future planning.
• Being reactive instead of setting clear goals and working towards them.
• Investing in things that don’t align with your value proposition. Make sure your product or service solves customers’ problems and refer to it when making plans.
• Creating a business plan that is not used and left to gather dust on the shelf.
• Failing to regularly check progress against your plan.
• Neglecting to consider future growth and expansion, such as exporting goods or services, and not preparing in advance.