THE road to business success requires good planning, management and vision in roughly equal amounts. A bit of luck doesn’t go astray either.
THE road to business success requires good planning, management and vision in roughly equal amounts. A bit of luck doesn’t go astray either.
Unfortunately, however, many businesses are relying too much on good fortune at the expense of a clear direction.
According to the consultants spoken to by WA Business News, while most businesses know the road they want to travel, many have no strategy or plan to get them there.
Deciding you want to be on the ‘growth-road’ is the first step to growing your business, according to Oak Small Business Coaching managing principal Phil May.
“The first step to growth is wanting to grow. Once you decide you want to grow and you want to take risks, then you’ve got to figure out how you are going to get there and how you are going to do it,” Mr May said.
“A business plan is the best thing to articulate that process.”
Commonwealth Bank State manager business banking, Guy Burdon, said more than 90 per cent of businesses existed with-out a business plan.
“Most companies, from those with $100 million turnover to mums and dads, don’t have business plans,” he said.
Mr May said many businesses failed to understand the real benefits offered by a business plan. Without one, he said, businesses did not have a concrete destination or a mechanism for future expansion.
“Do you have a road map to get to another suburb? You have to have a strategy to get there. Most people know where they want to be but don’t have a plan to get there,” Mr May said.
“Businesses need to build the road map as soon as possible to know what road to go down.”
Mr Burdon said business plans could, and should, be simple and adjustable working documents.
“My business plan is one page and has four points, and if I personally do those my business will grow,” he said.
According to Mr May, businesses that operated without a business plan could achieve growth, but it would be uncontrolled.
“Growth without a business plan is organic growth and generally not strategic,” Mr May said.
“You can grow too quickly. If that happens, you increase the number of debtors and possibly run into trouble.
“Generally people are thinking of wallet share rather than market share.”
Mr Burdon said writing a plan need not be an exhaustive pro-cess.
“It’s about putting a few things down and doing them well rather than putting hundreds down and not doing any of them,” he said.
While the banks did not re-quire a business plan for approving business loans, plans were a good strategy for business success, Mr Burdon said.
“We tend to do urgent things rather than important things. A business plan becomes urgent when a business is going into liquidation because the liquidator needs it,” he said.
“They need it because one of the best ways to sell a business is if it has a business plan.”
Mr May said an important part of writing a business plan was identifying goals and putting strategies in place to achieve them. Too often businesses that had business plans did not revisit them, he said.
“Most small businesses go into it with their dream and they work hard but they don’t have an understanding of what a business plan is,” Mr May said.
“It can be as simple as identifying and setting goals and putting steps in place to reach them.
“People should work on their business plan on a quarterly basis and should build in key performance indicators and milestones and check off whether or not they have achieved them, and to check what they have missed.”
The Small Business Development Corp-oration offers businesses with fewer than 20 employees financial support to have a private consultant prepare a business plan.
Director of small business services Bruce Macfarlane said that, through the SDBC’s Small Business Improvement Program, businesses could receive up to $4,000 on a dollar-for-dollar basis to engage a consultant to write a business plan, a strategic marketing plan, or an e-commerce plan.
“Business owners need to get three quotes and fill in an application for approval,” he said.
Mr Macfarlane said many business owners were too caught up in the day-to-day operations of the business to consider further options. A reference manual was available at the SBDC and could be ordered through local business enterprise centres and individual business owners could formulate their own business plan, he said.
“It’s a step by step, easy-to-follow guide. It won’t be as sophisticated, but it will get businesses thinking.
“We also hold two-hour workshops on introduction to business planning and where to go to next,” Mr Macfarlane said.
