Why Business Planning is Important?
At Firestarter, we are often asked how businesses should use practical business planning methods to move from survival mode into growth and prosperity as they mature and develop into established businesses. The answer sits within first knowing what to avoid when planning for growth, and then following the best practices to help you improve your planning process.
Throughout this article we will focus on identifying why business planning can often fail, some common mistakes to avoid and the best business planning practices to ensure your business planning work is a success.
Why Business Growth Plans Fail
Business growth plans are essential for any company that wants to grow its operations and increase its revenue. However, many of these plans fail for a variety of reasons. Often, business plans fail because leaders find themselves planning too far ahead or becoming overwhelmed with what to focus on. When you consider your headline strategies, product plans, your sales model, financial plan, organisational structure and leadership, these and many more factors can be daunting to look at when planning for growth.
From our experience with working with business leaders, we found that they have lacked confidence when it comes to business planning. Leaders we work with recognise that it’s important to be decisive in making things happen but having the ability to turn strategic thinking into practical actions can require some extra help. If you may face challenges with creating your own business plan, consider hiring a Toptal business plan writer to develop a comprehensive roadmap led by strategic thinking.
Common Business Planning Growth Mistakes
In the realm of business planning, easy to avoid mistakes can often be committed by entrepreneurs and business leaders. These mistakes can hinder business growth, reduce profitability, and even lead to failure. By familiarising yourself with common business planning mistakes to avoid you can increase chances of success and achieve sustainable growth.
Failing to break down the planning process into manageable parts
Business planning can feel overwhelming and confusing, particularly when faced with numerous themes and categories to consider. It’s easy to feel lost and unsure of where to focus when there’s a lot to do, and it can be challenging to discern the most critical areas to prioritise. Adding the need to consider different planning horizons only compounds this challenge.
However, breaking down the planning process into smaller, more manageable parts can alleviate this sense of overwhelm. One effective strategy is to separate out different timescales, such as:
- Next month
- Next 3 months
- To Christmas this year
- To the end of next year
- Your legacy
Each of these timescales should help you to work out why you are doing this and what you are trying to achieve. By breaking down the planning process into different timescales, you can focus on immediate and long-term goals, leading to more effective decision-making and greater success.
Including too much information
Planning for growth isn’t a difficult process and it isn’t something that should take up too much of your time to complete. Many business leaders get caught up with writing too much unnecessary information and end up losing the key elements that matter most. You should aim to keep your business plan clear and concise, this will help for when you need to share your business plan with potential investors or collaborators.
Doing it all yourself
Business planning for growth can be a challenging and overwhelming task, especially when it comes to handling everything yourself. From setting goals to mapping out targets, it’s easy to feel daunted and unsure of where to start. However, it’s essential to remember that there’s value in seeking help.
One thing that can often be forgotten is the need to collaborate with others and surround yourself with other people who will support your plans and hold you accountable and help to take your business forward. Asking for help doesn’t mean that you’re weak or unable to handle the task at hand.
At Firestarter, we offer a range of business planning services to help businesses of all sizes and stages with their planning needs. From creating a solid business plan to turning strategic thinking into practical and executable plans that provide a framework for growth, we can help.
Competitor analysis ignorance
Business leaders can sometimes inherit ignorance through the notion of thinking that their idea is truly unique and that there is no need for competitor analysis. The truth of the matter is that there is no such thing as no competition. At the end of the day, you may have a unique business idea but if your business didn’t exist where would your target audience spend their money? That’s right, they would be giving it to your competitors. Identifying and analysing your competition is crucial to any business plan.
Don’t forget the financials!
The forecasting of financials can seem quite challenging to most, this is why a common mistake is to leave out any form of financial forecasting from your planning process. The negative impact of not including your financial data can be significant in the fact that without accurate and up-to-date financial information, it will be difficult to make informed decisions about the direction of your business in the future. One way you can do this is to incorporate the use of an analytical CRM system to improve your financial planning and forecasting accuracy.
Business Planning – Best Practices
The great thing about being aware of common business planning mistakes is that once you are familiar with them you can then work to avoid them. There are useful tools and practices that can assist in not only avoiding these mistakes but also conquering them through strategic planning.
Establish your strategy across planning horizons – By breaking down your business planning elements with achievable timeframes you will be able to work to achieve realistic targets and have a clear direction on you want your business to grow.
SWOT Analysis – The use of a SWOT analysis as a strategic planning tool allows businesses to appraise their internal strengths and weaknesses alongside the external opportunities and threats posed by their surrounding environment. This model provides businesses with the capacity to accurately identify areas where they may improve and develop a comprehensive strategic plan to effectively address these areas.
Product Strategy on a page (PSOAP) – Being able to articulate a clear product strategy will drive not only your commercial (financial) thinking but also the whole basis of your operational business. You need to define a clear plan and then “live by it”.
In conclusion, planning for growth doesn’t have to be a daunting task. By taking a step-by-step approach and utilising available resources, it can be simplified into a manageable process that doesn’t require a significant amount of time or effort.
How can our Business Planning Services assist you in Achieving Growth?
Firestarter has acquired top-notch tools and expertise over the years through a hands-on approach that has assisted numerous businesses in achieving their growth objectives and targets. Planning everything from financial strategies to organisational structure, we’ve been helping businesses at an SME level right up to corporate.
If you’re seeking guidance in achieving your business growth objectives, don’t hesitate to reach out to us.