Business planning….does it matter?
19 May 2015
Many successful business people do no planning. They simply have a passion, a belief in their business and get on with “doing” the business. Great – but how do you know you have reached your revenue potential year on year? Have you maximised every opportunity? Are you aware of the changing competitive landscape? More importantly, do you know your customers’ changing profile?
Planning is a way to ensure you explore all opportunities, extract every morsel of potential revenue, drive down costs by keeping abreast of technological advancements or new business models, continually engage your staff, the powerhouse of any business, and regularly refine your marketing mix by knowing and caring about your customer.
Let’s define the difference between a strategic plan and a business plan. A strategic plan is primarily used for implementing and managing the strategic direction of an existing organisation. A business plan is used to initially start a business, obtain funding, or direct operations. The two cover different timeframes, a strategic plan generally three to five-plus years, reviewed annually and a business normally no more than one year.
Why invest time in planning?
Business planning is a journey of reflection, understanding the landscape in which you compete, identifying weaknesses and threats, then mitigating these in pursuit of capitalising on your strengths and opportunities. It is a powerful way to tell the story of where you came from and more importantly, where you are going and how you intend to get there. If you don’t know where you are, how do you know where you are going?
Planning can be invigorating, exciting and empowering because the more you understand about your business, the more passionate you become about ensuring its success. Failures along the way are powerful learning insights and by reflecting and incorporating these insights into your planning cycle, they will not only strengthen your resolve, but also your business success.
So where should you start? Have a Vision
Ask yourself why you went into business. Is this reason still valid? Does it warm the cockles of your heart? Ultimately, a vision rarely changes but it should be the driving inspiration in your business. To illustrate this point, let’s look at Nike Inc. arguably the most recognised brand in the world. As eloquently expressed; “Before there was the Swoosh, before there was Nike, there were two visionary men who pioneered a revolution in athletic footwear that redefined the industry”. They were Bill Bowerman and Phil Knight who in the 1950s wanted something more for athletes. Their vision (mission) was to dress any person as an athlete and this vision holds true today.
NIKE Mission Statement
“To bring inspiration and innovation to every athlete in the world”
“If you have a body, you are an athlete.” (Co-founder Bill Bowerman)
NIKE achieved long-term growth through eight things that defined who Nike is, what it does, and how it operates to reach its potential.
- We love sports
- We are global
- We are strong portfolio of brands
- We led the innovative product
- We connect with the consumer
- We manage the marketplace
- We operate with excellence
- We are committed to growth
While none of us are in the league of the multinational conglomerate that is NIKE, it all started with an inspiring vision.
Whether you are NIKE or a one-person business, the vision is the inspiration that will drive your business to reach its potential year on year.