“No matter how carefully you plan your goals, they will never be more than pipe dreams, unless you pursue them with gusto.” — W Clement Stone
Report by Phillip Chichoni
I asked five business owners the above question and here are their responses:
- “I don’t know. I am still to work on it.”
- “Ahhh. I will see. I will first need to look at how we did this year.”
- “I don’t waste time planning because things are still not steady in this country. With so much change expected, you really cannot plan.”
- “When I made a plan three years ago, I found that the resources needed were simply beyond my capacity. So why bother making a plan when you know it will not be feasible to implement?”
- “This year I was averaging 10 000 chickens per two month cycle. My plan for next year is to triple that to 30 000 per cycle.”
What is your plan for 2013 and beyond?
Mine is to reach US$1 million in revenue in 2013 and US$10 million by 2015.
Why bother planning in an unstable environment?
It is true that the environment is changing all the time. But that is nothing new; uncertainty has been a feature of the business environment ever since humans began commercial activities.
Insurance companies were formed centuries ago to provide a means of managing the risks inherent in sea travel, as well as that of fire to property.
Modern business as we know it, only became possible when the principle of limited liability was introduced in company law.
Otherwise no-one would have put their money in a business where one risked losing everything, including personal property, if the venture failed.
There will never be a time when things will be stable. An environment that is always predictable and smooth sailing presents no opportunities for entrepreneurs.
it presents no room for innovation and new ideas, which are fuelled by the reward that comes from risk-taking.
So you definitely need to plan in order to prepare yourself to grab the opportunities that are always presenting themselves in this dynamic environment. Without a plan and clear goals, you will have no motivation to propel you forward.
You will be like someone wondering aimlessly without a clear destination on his journey.
You don’t need a 40-page business plan
Some people don’t bother planning for their business because they think it is a long and arduous process. They see a business plan as this thick-bound document that no one can really follow.
Well, if you are presenting a business plan to a financier or investor, it might be necessary to develop that 40-page plan, complete with five-year financial projections. But a plan for your strategic purposes can be as short as a one-page sheet that shows the what, how, when and where of what you want to achieve.
Perfect your business model
One thing entrepreneurs often overlook when working on strategic action plans is the business model; how the business will make money and grow.
Sometimes we focus too much on our product and service, how good it is, and forget the fundamental issues of whether it will sell.
A few questions you need to ask and answer are:
Who is your customer?
What are their needs and why will they buy your product or service?
How can you prove that the need exists — either through an existing market or a proof of concept?
What is the customer willing to pay for your product/service and how do you know they are willing to pay this amount?
What will it take for you to deliver your product or service on an ongoing basis? What is the estimated cost to deliver your product/service to the customer on an ongoing basis?
Is the market big enough for your plan’s targets?
How will you handle competition?
Answers to these questions will determine the feasibility of your plan. I have developed a business planning guide which you can download at the website shown below. Please feel free to share you feedback and suggestions and to follow SME Businesslink on LinkedIn and Facebook.
Phillip Chichoni is a strategic business planning consultant who works with entrepreneurs and growing businesses. You may contact him by email on email@example.com, or visit http://smebusinesslink.com