Are you a small business owner without a business development plan? If you don’t have a plan to grow your business it’s quite understandable. Maybe you’ve never had the time or don’t know where to start.
When I was thinking of starting my business, I hadn’t even heard of a business development plan. What I did have though was an encouraging friend who gave me a quick ‘overview’ of what a small business owner should be thinking about if they wanted to grow their business – which I did.
Following his advice, a few hours later I had my first business development plan. It was all in pencil with lots of rubbing out but it showed a profit of $7,820! Wow I was happy with that.
In fact, what happened was that I made more than that. In my first 6 months I made $11,000.00 profit following my plan! I’d found the key!
Two years and 3 employees later we had continued to make profits and were gaining market share. Around this time I remember reading a quote:
Although we were doing well, I was feeling a little under pressure. I was wondering how to keep my 3 great employees interested and motivated. I was wondering “what’s next? Around this time I remember reading a quote:
“If You Aren’t Moving Forward, You’re Going Backwards”
And then I was introduced to someone whose profession was to help people make a business plan. (I’d never heard of such a person!).
He introduced me to the business planning process. He knew all the essential components of a business development plan and helped us to write the first real plan.
Following the business plan the first year worked really well and I started to understand the power of having and working with a business development plan.
A New Business Development Plan Every Year
As the business grew and developed, strengths, weaknesses, opportunities and threats would change. Each year we would address all the strengths, weaknesses, opportunities and threats in a new SWOT analysis.
When we’d done that we would go through the business planning process and write a fresh plan for the coming year.
Following my business development plan year after year meant that 15 years later we were a very successful and profitable service business. We had a turnover of $12m pa with 3 offices and 28 staff.
Because the business was really profitable it became desirable to buyers and so when I was ready to retire from that business I sold it to a publicly listed company.
Without doubt, the business plans kept me focused. It just wouldn’t have been possible for me to grow and develop the business to that level without one.
Why Do We Start A Business: What’s The Motivation?
In my case there were 3 distinct reasons (are yours the same?):
- I was really good at what I did
- I was making a lot of money for an ungrateful employer
- I had recently found myself divorced with no property and $25,000 in cash. I had to find a way to make enough money to buy a home again and look after myself
A Key Motivation: Opportunity
A common motivation to start a business is opportunity. It could be an opportunity to:
- Making a better income and have greater choices in life
- Being your own boss. Being Independent
- Creating something worthwhile. Accomplishment
- Leaving a legacy or having an investment to ‘cash-in’ when it’s time to retire
What were the reasons or the goals you had in mind, for starting your business? Maybe those goals are different now?
Whatever your goals are, the way to achieve them is by having a realistic business development plan to get there.
How does a business development plan work?
A Business Plan Takes You From Where You Are To Where You Want To Be
I’m a great believer in a quote often attributed to Benjamin Franklin:
“If You Fail To Plan, You Plan To Fail”
Before You Write Your Business Plan – A Crucial Step
In the early days, my whole team would come together and we’d perform a SWOT analysis. Later it would be the management team.
We’d look at 4 areas: strengths and weaknesses (which are internal to the business), then opportunities and threats which are external.
It’s a good idea to include employees. Employees have a different perspective and so their input in invaluable. Also, going through a SWOT analysis together promotes a feeling of ‘inclusion’.
I found it useful to invest in having an external professional to lead us through the business planning process. Then everyone else in the session can focus on planning the future.
We’d go through a series of questions in the 3 key business areas:
- Sales and Marketing
- What advantages do we have?
- What are we really good at?
- What do we do well?
- What aren’t we good at?
- What skills are we missing?
- Does business ever ‘slip through our fingers’? Why?
- What do we know of but aren’t currently taking advantage of?
- What trends can we see happening that could be advantageous to us?
- What is out there that could cause difficulties for us?
- Do we know what our competitors doing?
Although simple, what makes a SWOT analysis particularly powerful is that it uncovers and highlights all the different aspects of the business.
This is what ours looked like when it was finished…
With the information I had from my completed SWOT, it was much easier to go through the business planning process and plan the year ahead.
The Process of Writing the Business Development Plan
Most professionals agree that there are 3 basic components of a business plan:
- Executive summary. (1 paragraph of what you sell, to whom and why)
- Marketing plan (how are we going to get the sales we need)
- Financials: Income (sales) and Cash-flow
I found the simplest way to start was to follow Stephen Covey’s now-famous quote:
“Begin With the End in Mind”
I’d start with financials by asking myself these 4 questions:
- What profit do we want to make next year – in $$?
- What is the best gross profit margin in our industry – in %
- What staff do we need in place, and when, to be able to do that?
Then, by keeping the results of the SWOT in mind, prepare a simple one page business development plan using a spreadsheet. This sample of a business plan that really works is an ideal place to start. If it worked for me it will work for you too.
- Using the ‘business development plan’ spreadsheet, firstly list the sales and income monthly goals.
- Then underneath the sales and income, list the expenses you expect to incur by making those sales.
- The monthly profit or income at the bottom of the sheet then becomes the goal for the month.
There is such great value in going through the business planning steps and then working with your business development plan. The value will make the effort to create one worthwhile!
You can follow the steps of writing your business plan in this post “How to Write A Small Business Plan In Under 2 Hours”.
Now We Have A Business Plan, We Never Look At It Again? Wrong!
For any plan to succeed it needs to be reviewed.
I reviewed my business plan at the end of each week. I always asked myself these 2 key questions:
- “Have we made the sales we forecast for this week?”
- “Have we collected all the payments we are due this week?”
By reviewing my business development plan against these questions every week, it provided direction. It answered questions like “what’s my priority today / next week?”.
When there are so many distractions day to day, asking myself those questions encouraged me not to get caught up in the ‘urgent’. It encouraged me to do the right activities to move the business forward to achieving my goals.
For best results, review your business plan against your management accounts at the end of each month. If you don’t have management accounts then first priority is to get some. Have the review when all the financials for the previous month have been agreed. I did this as a priority no more than 3 days after month end and the dates were booked well in advance in everyone’s diary.
To achieve goals and get to ‘the end in mind’ monthly reviews have to be a ‘no-fail’ priority. It’s crucial because it provides direction for the months ahead.
Review, Refocus and Redirect for Success
Your business development plan is a living document. Reviewing it at the end of each week and month encourages you to stop for a moment and ‘take stock’. You get the opportunity to step back from your business.
Stop, step back and ask “what do I need to be doing today? tomorrow? this week? and this month to achieve this month’s profit goal”?
In this context, I found Tony Robbins famous quote to be true:
“Whatever You Focus On You’ll Move Towards”
By continually refocusing on my goal, I continually asked myself the question: “what is it that I need to do today / this week / this month to get there?”
A business development plan provides clarity and encourages focus. It encourages you to take the right action to move towards your goals. It also provides a sense of achievement in a fast moving environment.
If you don’t have a business plan, getting started is easy. Here are all the business planning process steps you need:
What You Need To Get Started. The To-Do List:
- Schedule a time to complete a SWOT analysis with your staff. Just use the questions above and lead with your own input.
- 30 minutes on each of the 4 topics may be enough to get started (2 hours total).
- Make it an ‘interruption-free’ 2 hours (no ‘phones!).
- A whiteboard or butchers paper blu-tacked to the wall works well.
- For each category, write the numbers 1-10 down the left side first. Then try to come up with 10 ideas for each of the 4 categories.
- In the same session, get clarity on who your target customer is and why they value your service (always keep your customer top of mind!).
- Look for marketing ideas to help achieve your revenue goal, while keeping your strengths and opportunities in mind.
- Discuss how to improve your weaknesses and mitigate the threats.
After the SWOT Analysis:
- Read my post How To Write A Small Business Plan In Under 2 Hours and complete the to-do section there.
- Schedule brief weekly and in-depth monthly reviews to see how you’re tracking against your goals – and stick to it.
Have you ever been through the business development planing process and got stuck? What part did you find the most difficult?
Please write to me in the comments area below and share what has worked for you when writing a business development plan as I’d love to hear from you!