The last two weeks have been very manic with two clients requiring in-depth business plans to enable them to seek bank funding.
Now, both clients are established companies with between 8 and 20 years track record. They are exciting to work with as they are in very interesting fields and are known in their markets to have a high level of expertise.
Although the reason for doing the business plans was to get bank funding, the whole business planning process has had other advantages for both businesses.
Firstly, the process has allowed the directors to review their successes so far. Many business owners don’t take the time out of working in their business to acknowledge how far they have come. As we can all be inclined do, they concentrate on the negatives without giving equal importance to the positives. Having a specific opportunity to review their many successes has enabled them to renew their enthusiasm and remind themselves why they went into business in the first place.
Secondly, the planning discipline involves reviewing every part of the business and the relative effectiveness of each area. It looks at each area of the business in an objective way and enables the business owner to assess which areas of his business are working well and which need tweaking. This is an invaluable exercise, which is often left undone due to work pressures.
Thirdly, by doing a full swot analysis directors are forced to look at the strengths, weaknesses, opporunities and threats associated with their business. In identifying threats and weaknesses, acknowledging them, and exploring them in detail, directors have to look them squarely in the face and resolve to deal with them. In doing so the business becomes stronger and better able to deal with the negatives. Conversely, in identifying strengths and opportunities fully, the directors are able to see those areas which have contributed to current success and on which the future of the business will probably be based.
Finally, if done properly and revisited regularly, the business plan can become an important strategy document. Having spent the time to evaluate the business and plan for its success, so that a clear picture is formed of its future, the business plan then becomes a measure against which the directors’ goals can be assessed.
For these reasons, and others, I strongly urge clients to have a business plan, which they update on a regular basis. Not for the banks benefit but for their own.