Advice:So why is business planning so important?

By , published on 26th May 2011

“Where is my business going?”

No-one sets off on a journey without knowing where they are going and having a pretty good idea of how to get there.

Business is the same.

You need to plan in the first place, but you also need to check constantly that you are on course.

There are three simple questions that many businesses don’t ask themselves – but should:

Do you really know what your business is good at?
Do you have a good idea of where you want to be in 3 years’ time?
Do you know if you are doing well enough to get there?

One of the reasons why many business owners fail to plan properly is that they are too close to their business – you are all emotionally involved and your time is taken up with solving the day-to-day problems.

As a result you may not have time to step back from the business and take a long look at it – that’s where an impartial adviser can help you most.

We’ve all said it – “I have more important things to do than plan”

But people who say that end up working longer hours for the same profit.

They chase sales in the belief that turnover is the key to success.

You know you are in this trap if your turnover rises and your profits are static or falling.

Remember: Turnover is vanity, profit is sanity

Your aim should be to improve profitability by at least the same level as turnover.

You will only be able to do this by planning ahead, analysing your performance and keeping your finger on the pulse of the business.

Five key tips to remember

  1. If you don’t know where your business is going, any road will do (so  set yourself some goals)
  2. Be proactive in your planning, not reactive  (plan longer term not just day to day – business is a marathon not a sprint)
  3. Implementation is key (a plan in isolation is worthless – put it into action and not in a drawer!)
  4. Monitor performance and effectiveness – in terms of financial/sales/people/your happiness factor
  5. Adjust your plan as necessary – it’s not set in stone; if markets change then the plan has to change; seek advisers’ help.

To summarise: why Business Planning is vital

A good business owner wants to control the business rather than be controlled by it.

If your focus is short-term then you are being controlled by your business.

By taking a longer view and having a direction, you have a better chance of controlling your own destiny.

Regularly ask yourself

  • Where am I now?
  • Where do I want to be?
  • How am I going to get there?
  • What might get in my way?

It is better to use the help of an IMPARTIAL ADVISER to help you answer these questions to give you an objective picture of your business – which means you have to be forward thinking enough to ask for help. Are you?

Remember to fail to plan is to plan to fail

If you need a professional review of your business plan, then please contact me at Janette Whitney & Associates on 01403 733671 or visit www.whitneyassocs.co.uk for more information.

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Janette Whitney

About Janette Whitney

Janette Whitney is an award-winning business consultant, media columnist and award-winning business author. She specialises in business growth strategies and finance and formed her consultancy business after a highly successful career in banking. Janette’s expertise has won her both national and regional awards which include ‘Consultant of the year’ and ‘Business Book of the Year’ award (as co-author of ‘The Essential Business Guide’).

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