Do Business Well

The Business Plan as a Management Tool

Too often, it happens that an elaborate business plan is drawn up for the bank and investors, and then it ends up in a cupboard gathering dust. Instead, you should use the business plan as a management tool to keep track of your progress and benchmark your successes. Obviously, your business plan will also change as you go along. It is a dynamic tool that you should be constantly sharpening and tweaking. So, how can you use your business plan as a management tool?

• The planning and management process: Discipline shall set you free. Committing a strategy to paper requires discipline and forethought. It requires a big picture of your business before you commit your life to it. Many entrepreneurs lack this perspective as they run around putting out fires and reacting to crises that they could have pre-empted if they had the plan in the first place. Writing and rewriting your business plan will give you the mental discipline to take stock of the business and strategize for the future.

In many ways, business is like any other game. Unless you have a firm “game-plan” before the match, you’re going to come short. What’s more, just like sports, you need to keep adjusting the plan to take into account new realities.

The completed business plan should illustrate where you are, where you want to be and how to get there. You should be constantly referring to your plan and tracking the progress you are making towards your goal.

To illustrate our point even more explicitly, we believe your business plan is like a roadmap showing you how to get to a certain destination. When you get a map from the AA, it details the path, the mileage, rest stops and the road conditions you will experience on the way to your destination.

Inevitably, because business is an uncertain science, you will deviate from the plan during the year. Using the plan as a benchmark will help you in evaluating these deviations moreobjectively so you can get back on track fast.

• Internal communications: The best businesses are always transparent. We recommend publicizing your plan to your employees as far as possible. While there may be certain financial information that you want to keep secret, sharing your plan with your people will ensure everyone is on-board with the business vision. Your people can then accurately share this information with your customers. They will feel empowered. They will understand why you are asking them to do what they are doing. They will give you that little bit extra.

You will also receive feedback from employees, and this two-way communication will help you make better decisions and run a more successful business.

• The outside world: An up to date, well-prepared business plan is a huge advantage when dealing with banks, creditors and investors. It projects a professional image and reflects well on your planning and management ability. Furthermore, because so few entrepreneurs have a well-developed plan, you will stand out from the crowd.

Phew! Take a breather. You’ve earned it.

We congratulate you for having made it this far. You are obviously an entrepreneur who is serious about getting ahead. We promise you that a thoroughly prepared business plan will pole-vault you into success. Take control of it and take control of your destiny.

Do it now, practice your dress rehearsal: on the basis of what we’ve shared with you, write your own business plan. Nothing will help you learn what we’ve shared with you more powerfully than writing your own plan, even if you don’t have all the pieces of the puzzle yet.

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