WHY BUSINESS PLANNING IS ESSENTIAL

Andrew Burton on the importance of planning for long-term business success.

It used to be that business plans were like road maps, but as technology develops they become more like a Sat Nav due to ongoing developments throughout the UK. What I mean by that is that it is possible to travel without one, but it will only increase the chances of getting lost along the way or at best increasing your journey and effort.

Planning for the road ahead is vital

Rather than putting themselves in a position where they may have to stop and start your journey again, business owners and influential management often use strategic plans to guide them; often using fresh eyes and consultants to bring something new to the table. The correct planning enables everyone to see the bigger picture, plan ahead with timelines, make important decisions, and increase the overall likelihood of success.

A strongly formed business plan is essential, not only to give a strategy for a vision, but also to provide businesses with the ability to lay out their objectives and measure their progress as the plan develops. There is no doubt that creating a business plan should be the first thing on the agenda when planning for the year or years ahead, changing a business or even starting a new business.

Though it may sound like a tick-box exercise and time-consuming to some, others live and breathe their plans and business plans are critical to the success of their objectives.

Common reasons businesses fail include:

  • No market need: Customers do not want what is being sold.
  • Lack of capital: Cash flow issues or businesses simply running out of money.
  • Inadequate team: Teams sometimes need the right people to help operate a business, both employed or consultant based.
  • Competition: Not all businesses put enough consideration into their competition or changes in the future.
  • Prominence: Customers do not understand what the business specialises in or stands for.  It could be price, service, quality, ambience…the list goes on.  But if a customer doesn’t understand a business, what reason does it have to visit?

A business plan can help avoid these issues.

Here’s why every garden centre or farm shop should invest the time in creating a business plan:

Plans prove the viability of the business

Many businesses are driven by passionate owners, but while passion can be a great when thinking about business values and motivation, it doesn’t always lead to clear thinking and financial strategies. Planning exactly how to turn that vision into a successful strategy is the difference between a dream and a reality.

It helps with making essential decisions

The primary importance of a business plan is to help deliver an end goal and help business owners make better and calculated decisions.

Owning a garden centre or farm shop is often an ongoing exercise in decision making and reactive management. Having time to consider all the outcomes from  any given decision is a luxury that many business owners can’t always find. This is where a business plan comes in.

Creating a strong strategic business plan is often a period of reflection and positivity.  It requires time to sit down and think about major parts of a business prior to creating the plan, such as product ranges, price points and development needs.

Identifies any issues

Putting together a business plan requires businesses to ask themselves what they want to change, and then take the time to come up with the right decisions in moving forward with objectives.  Often a business plan goes through numerous versions until it is finalised, but this helps to articulate a vision and determine any issues in its strategy.

Market Research

Market research has to give a deep understanding of a business’ customers and its competitors. It informs decision making in areas such as product ranging, marketing, advertising, staffing levels and services.

To set better objectives and benchmarks

Without a business plan, objectives often become lost or in some case, they don’t even get off the ground.  Having a business plan can help make objectives clearer, specific, measured, with a timeline and with consequences. By building objectives often using SMART objectives, they also help maintain a focus on long-term vision and strategy.  Using SMART objectives alongside a reporting ‘Traffic Light System’ gives regular control of performance and can be the difference between hitting targets or missing them completely.

Building and monitoring objectives sounds simple, but raining key management, either to introduce this as a new skill, or simply as a refresher, gives them the tools to set specific objectives in the correct way.  Having trained numerous teams over the years it still surprises me how much teams benefit from this sort of training session and how quickly it benefits a business – a trend set to continue in the future.

An operator can’t always be there to make every decision, so training teams to understand how the larger plan fits in to their daily work and helping them to make decisions to support that the bigger plan is essential.

Training and trusting teams ensures that they can consult a business plan to achieve their goals, while sharing a business plan with a team helps ensure that all staff understand and are in line with its objectives.

To evaluate a business against the market

No business is untouchable and we have seen this is very much the case in 2020.  While managers and owners might have a strong handle on everything happening within their own boundaries, it’s equally important to understand the ever-changing market too.

Writing a business plan and taking advice from consultants and suppliers goes a long way in helping to better understand a business’ competition and the market it is operating in, or wants to move in to.  Understanding the latest consumer trends, potential disruptions and any other insights that may provide support in the future can’t be understated.

Reducing risk

Business development doesn’t ned to be a risky business, but it can be if operators don’t use all the tools within reach to write a plan.  Risk becomes significantly more manageable once tested against an established business plan, so using networked contacts and consultants can really help.

Drawing up financial plans, which cover everything from daily operational needs, to longer term business development projects can all help reduce the risk factor from a gut feeling passionate decision focus.

To summarise, having a business plan, built at the right time, with the right resource and skillset, helps in making better decisions, gives confidence in delivery of objectives and is more likely going to help convert a vision into a reality.