Power Up Your Business Plan

Outside Help

As Hovey explains, the one thing an owner can’t get from the ‘inside’ is the benefit of ‘fresh eyes’, and contemporary and relevant insights from external advisers whose practice and experience will often have them concurrently working with owners across multiple sectors and a variety of business sizes.

"External advisers can be fearless in challenging assumptions, not simply telling the business owner what they might like to hear," he says.

You also need to make sure you review the plan. "It is imperative that businesses revisit their original plan annually," says the NSW Business Chamber’s Jon Moyes. "Or at least every two years, to help you determine if your desired level of recompense is achievable; to review the various options available to achieve your goals; and to redevelop the framework of your original plan in order to achieve your goals.

"Regular reviews will help identify areas for improvement, and will identify your strengths, successes and wins, enabling you to build on these foundations.

"It is important for all business owners to regularly step away from the daily grind and rethink their plan for a successful business future. This is why NSW Business Chamber has developed a Business Planning CD which has tools, templates, checklists and worksheets to assist business owners to identify key operational, financial, HR, sales and marketing issues, and create an 'actionable' business plan."

Hovey agrees and likens a business plan to a ‘match’ plan for a football game. "While a football coach has the opportunity to review and revise tactics at the half-time break, so too does a business owner have a series of ‘breaks’ which can be used to review progress and fine-tune tactics. These arise at the end of each month, where the duration of the review might be relatively short, and at the end of each quarter. An annual review of the business plan then affords the business owner, as ‘coach’, to seek and make refinements for the next ‘annual game’.

"Strategic plans also require review, certainly annually, where a relevance and context check can be done and minor fine-tuning implemented where necessary," says Hovey.

Each time you review your plan you should undertake a SWOT analysis, which will indicate how you got where you are.

You should also monitor the progress of the plans and measure their success against pre-set KPIs. And revise the vision by adapting or changing it in line with market changes.

In Hovey’s experience the biggest errors he has seen business owners make are having too many goals and objectives and not taking enough time to measure and monitor.

And the results of those errors? "An inability to see or deal with ‘icebergs’ once your ship hits them!" says Hovey.

Key Questions

There are several questions that need to be answered before developing a business plan, and your responses should give you a thorough understanding of your business and the direction it should be taking.

Your products and services:

What are the main applications, and who will buy them?

What trends do you anticipate?

Who do you see as potential competitors?

Does your competition offer a wide range?

How will yours be differentiated from competitors?

What advantages and problems are associated with yours?

Do you see scope to expand the range?

What price do you anticipate charging?

What will it cost to supply?

How price sensitive do you believe demand will be?

Your market:

What is the current Australian market for your product/service?

What is the current overseas market for your product/service?

What problems do you anticipate entering the market?

Have you identified a niche in the market?

What characteristics do you see this market niche having?

What characteristics do you see your customers having?

What are the trends in the market in terms of how they will affect your product/service penetration?

What market share are you aiming for?

What are your anticipated distribution methods?

What other distribution methods are there or could there be?

Your competition:

What are the strengths and weaknesses of your competitors?

What assumptions have you made about your competitors in relation to your proposed business?

In what form does competition exist in the market?

How established are your competitors?

How important to your competitors is your offering?

What reaction do you anticipate from competitors when you launch?

How will you combat this?

Production and servicing aspects of your business:

What methods are proposed to manufacture or service the market?

What technologies are required and how advanced are these?

What production servicing problems do you anticipate?

What do you anticipate will be the critical factors for production and servicing operations?

How important are these factors?

To what extent do you anticipate you could reduce the importance of these factors?

* Charisse Gray is senior business writer for NSW Business Chamber.