Is your business growing to plan, or are you planning to grow?
One of the most important activities in running a successful business is clearly defining your goals. By doing so you will have a purpose, direction and reference point to measure whether you’re moving forward or not.
Why is the WWHWW concept important?
Many business owners either don't understand the importance of business planning, claim they don't have the time or are simply intimidated by the thought. A business plan is a crucial component of the business planning process. It’s a document that crystallises the Who, What, How, When and Where of your business – a written expression of your thoughts about the business opportunities and how you intend exploiting and managing those opportunities.
Planning is about:
- Setting goals, in particular, financial goals
- Strategically allocating resources
- Delivering outcomes in a logical order
- Determining conflicts
- Identifying dependencies
It’s a dynamic (and constantly evolving) process because there is, by its very nature, a degree of uncertainty in any planning or forecasting process. But it’s when conditions do change that planning comes to the fore.
Convinced yet about the importance of planning the future of your business?
Let’s assume you’ve wisely taken time out of your busy work schedule to do some business planning. Firstly - congratulations.
Now, when faced with uncertainty (and it will happen) you can respond quickly and make the necessary adjustments to keep your business on track to achieving your profit targets and lifestyle goals for the year.
What should be in your business plan?
Whilst the structure and content may vary depending on the nature of your business and your client base, at a minimum it should cover the following:
1. Business Objectives
They are really the heart of any business plan. They give a clear indication of where the business is heading and what it’s striving to achieve.
2. Marketplace information
Here you justify your business concept and outline the “why” it will work.
3. Infrastructure, resources and logistic requirements
This section details the “how” you are going to deliver your product or service to the market.
4. Financial requirements and budgeting
It’s the ultimate measure of success.
The importance of financial budgeting
Of critical importance for all businesses owners is a clear understanding of the amount of cash required to run your business. Cash is an expression of your business plan and it determines whether your business will succeed or not.
Cash flow is best monitored on a monthly basis. Using a monthly Cash Flow Statement will help you monitor the performance of your business closely and alert you if corrective action is needed.
Don't leave it until the year’s end to find out you have missed your profit targets. Talk to your accountant and take advantage of our informative, free, no-obligation consultation that will inspire you to start planning for growth.
With you in every success,