This is not fake news: Business planning is absolutely critical for success
30 July 2018
Business planning is an essential precursor to undertake for any venture. It helps you achieve the vision you have for the business. It is a critical tool in developing a roadmap that plots how your business intends to achieve its goals from a marketing, financial and operational viewpoint. A business plan turns abstract goals into concrete operational steps, and assists in making decisions, like how to balance resources for supply and demand. Put simply, business planning reduces the likelihood of failure and increases the chances of success.
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? Do you know your customers’ changing profile? And importantly, how do you know if the actions are driving you towards your vision? Or driving you away from it?
From experience, having developed many business plans for my own businesses, within large corporates and with my clients, the benefits of business planning are quite literally transformational. I will cite an example.
Business planning in action
I was part of the senior executive team, later appointed as the Chief Executive, of the third largest tourism attraction in the country. We were experiencing significant failures and were close to bankruptcy. If anyone has been in this position you will know the pain and humiliation that comes with being in an organisation that has been mismanaged. The reasons for how we found our organisation is this position are too numerous to outline, however, we knew we had to do something, and quickly.
Like any battle situation, and this is what it felt like internally and externally, we retreated and went into planning mode. We knew we had to build the business from ground zero and unpack everything in order to create a new business model and to rebrand our organisation locally, nationally and internationally.
The important business planning questions we asked ourselves
We started with our strategic intent – what is our vision? Why are we in business – what is our mission? What is our promise to our external and internal customers? And how do we want to be seen – what are our values? What is our personality and/or culture?
By starting at this high level of thinking, we could envision what success would look like. We had a clear view of where we were going and by undertaking research, working through a range of processes including SWOT* and PEST*, we outlined each building block to get us from where we were to our envisioned success. We developed working plans for each department and empowered them to drive their success.
The transformative result
These strategies collectively resulted in our organisation achieving the best results ever in the 40 years of operation after two years of implementing this plan.
As a result, we won a national tourism award, our revenue increased significantly as we regained the trust and respect from our partners and key stakeholders, we paid down all our debt in three years, and our employment brand significantly improved as we started to attract talented staff.
But for me, the most rewarding result was our staff went from feeling humiliated to being proud that they worked in this organisation.
I hope my story illustrates the transformative power a business plan can provide to any organisation. Whether you are in the start-up phase, on your journey, or preparing to exit, if you have a clear vision and an executable roadmap, you will achieve your own vision of success.
Allison Lawton, Director, AVID Management Consulting Agency
*PEST and SWOT are business analysis approaches. PEST is an acronym that stands for political, economic, social and technological influences on a business. SWOT is a situational analysis tool for that involves assessing strengths, weaknesses, opportunities and threats.