There are certain words in business that, when they are spoken or, in many cases mumbled, behind a quivering hand, make the chin drop and eyes bore holes in the carpet.
Words such as all the tax phrases, terminal, provisional and GST. Words such as balance sheets, bank reconciliations and creditors reports.
All really nice words if used in a non-business sentence — like the word “plan” can be a great word, as in “let’s plan our holiday”.
But when I talk to clients and I put the word business in front of it, well, what do you know, it’s the “old chin droop, eye bore, time for a new carpet syndrome”.
Why does it have this type of effect? Well, I have done a very short study on it (I asked somebody) and this is what they said: “We have never done one before, we have no idea how to start it, we don’t know what to put in it, we don’t have the time and, really, what’s the point?” Then they took a breath and just stared.
Let’s take the only serious objection they had — “what’s the point?”
The point is every one of us who owns a business has a plan for the future. Now don’t think just because I said that, you can stop reading now. Because there are business plans and business plans and, for a lot of business owners, the plan is tucked away inside the grey matter, under the expensive hair job being kept warm by the winter beanie.
The objectives of a good business plan are to extract the ideas, thoughts, dreams, goals and the extraordinary entrepreneurial brilliance that is hiding in the head and get it down on paper.
“But why?” you shout, “it’s happy up there!” But if it’s written down in a well presented business plan format it will become a road map for your business to follow to achieve your goals (that sounds like something your accountant or bank manager would say).
As I said, there are plans and plans. I have seen business plans that are leather bound, kept in a box and ones written on a beer coaster.
Which is best? In my opinion neither, although they both have a place. At Trades Coaching New Zealand we use a very simple two-page template that the client fills in the gaps for.
We use this approach as it covers all the objections from the extensive client study I undertook. If you have never done one before, just follow the instructions. If you don’t know where to start or what to put in, just follow the instructions. As for time, it takes hardly any.
The first page is a quick biopsy of the business — who, where, what type of stuff. The second page covers the meaty bits — the goals, the budget (don’t get scared here, we will cover this another time), the exit strategy and the most important part — an action plan.
So to the big question — “what’s the point, do I really need one?” The truthful answer is no you don’t. The prudent answer is yes you do.
It gets the jumble in your head in a working order, and it will allow you to get external help, including accountants and business coaches. It will give you that map to follow, an action plan with key dates to work with, and the list goes on.
As construction experts that you all are, following a plan should be second nature to you. You can’t be expected to build a house without a set of plans so why should you be expected to build a company without a plan?
One important point to always remember — your business plan is always a work in progress. Keep it a fluid document because you never know what door is going to open around the corner.
One last point to make in the favour of business plans — I come across many businesses owners that say “the bank said no”, with a wee tear starting.
My first reply is “how did you present your case?” They then say, “well I just went in and asked”. If they went in with a well presented business plan, a budget cash flow forecast and a proposal concerning why they are asking, the odds of getting a bank to say yes will increase many times over.
We have business plan templates at Trades Coaching New Zealand which we are more than happy to email to you if you need one. Please just contact us on the number below, and this will be done.