Hi Guys,

I have worked for years without a Budget or Business Plan. Is it really worth the effort to throw darts at a piece of paper and write a document which is just based on guesswork?

I have always worked with a Budget and Business Plan and can’t really imagine working without one. That’s not to say without these documents you’ll fail. But think of it like driving to a destination. You can go without a map and follow the same route you always have.

Or, with an up to date map (Budget/Business Plan), you can dodge road works and congestion (changes in the market) by changing course (altering your Business/Sales Plan) to get to the destination first-ahead of the competition.

The Budgets and Business Plan communicate to everyone involved in the business what the expectations are for all concerned.

Your Budget should clearly communicate the financial recipe for your business success. It should be a balance of your historical results and your expectations for the future. Be careful not to overstretch your budget. You should challenge your business and staff, as this ensures growth and commitment. Indeed, having your staff involved in the budget process will promote ‘buy-in’ and understanding of expectations. However, unrealistic or unqualified targets will withdraw staff ‘buy-in’ causing anxiety and stress under the weight of perceived  or speculative failure.

With your Budget agreed, the method of delivering these outcomes is contained within the Business Plan. As with the Budget, the Business Plan should be drafted using a consultative approach with key staff and stakeholders. It is important to canvas new ideas and strategies from your team. These inputs will be vital to navigating the expected business landscape to deliver the Budget. Unlike the Budget (which can be drafted using simple spreadsheets for the most part), the Business Plan is a complex and weighty document. Having said this, you will get far more out of the development process than you put in. Documenting your Business Plan can in itself be a journey of discovery defining your real business position in contrast to your perception.

Below is an outline that I have developed and used successfully over the years and more recently with new clients. With such a dynamic commercial environment today, I cannot stress how important the completion of this document is. Spend the time and you will get the results.

Just one last thing. Both the Budget and Business Plan are never cast in stone. They should be reviewed against initial expectations at least quarterly.  Achieving your Business goals is rarely by accident or good fortune. It comes from monitoring your performance and making the subtle changes required to stay on track.

Sample Business Plan outline

1       Business Snapshot

1.1         Purpose of this business review

1.2         Business structure

1.3         Business activity

1.4         Products and services

1.5         Points of differentiation

1.6         The Product, Market, and Customer Segments

1.7         Mission Statement

2       Overview

2.1        Current position

2.2        What’s changed from the current situation

2.3         Structure and Resources

2.3.1          Organisational structure

2.3.2          Key people

2.3.3          Key advisors

3       Marketing Plan

3.1        Target market

3.2         Market Access Plan

3.3         Marketing and promotion

3.3.1          Planned activities

3.4         Customer Strategy

3.4.1          Customer management

3.4.2          Customer acquisition

4       Business Environment

4.1         The industry

4.2         SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis

4.2.1          Impact of STRENGHTS on Opportunities and Threats

4.2.2          Impact of WEAKNESSES on Opportunities and Threats

5       Future Business Goals and Objectives

5.1         Business and Personal Goals

5.1.1          Business goals this year

5.1.2          5-year plan

5.2         Action Plans

5.2.1          Top 3 in 3 months

5.2.2          Top 3 in 6 months

5.2.3          Top 3 in 9 months