Discover the Importance of Business Planning Perth. How can it affect your business success?
The Importance of Business Planning Perth is essential as the business world can move so quickly that it’s easy to miss out on great opportunities, deviate from where you want to go and prevent you from achieving your goals. This is why having a documented business plan is so important for all businesses, no matter their size or stage.
Having a clear business plan keeps you focused on the goals that are crucial for success and provides guidelines for day-to-day operations and decisions. A good business plan gives you goals to strive for during the next week, month, year and beyond. It will allow you to plan in advance for additional expenditure, manage slow periods in business and estimate the staffing requirements needed to achieve your goals.
There is no logical reason to wait for external motivation, like your bank manager asking to see your business plan, before you write one. Committing your plans to writing helps to sharpen your focus and identify your priorities and can be used as a benchmark to measure your progress towards achieving your goals.
Business plans are an essential management tool that tell you what you plan to achieve, plus how and when you plan to achieve it. That is why the Importance of Business Planning Perth is so valuable. Set time aside to assess actual progress against your business plan to keep your business on track. Update your plan as economic, market and individual circumstances change.
The primary purpose of your business plan is to map out a strategy and action plan for your business, but it also serves a useful secondary purpose as a reference document for external parties with an interest in your business.
Setting your goals
Your business will not operate as efficiently and effectively as it could without specific and defined goals. Your business plan is likely to outline goals for some, or all, of the following.
- Financial objectives – for example, to increase turnover or reduce operating costs by 5% this year.
- Strategic objectives – for example, to increase the number of corporate clients by 20% within two years.
- Operational objectives – for example, to increase output by 10% within six months.
- Marketing objectives – for example, to increase total sales to existing customers by 10% next year.
- Social/Environmental objectives – for example, to decrease your carbon footprint by 5% each year for three years.
Holding a staff brainstorming session is a good way to benefit from their expert knowledge and gain their input and support for your business plan and objectives. Depending on the size of your business, you might hold only one brainstorming session or several to cover the objectives for various business units.
Keep your goals realistic and pertinent to current general economic conditions and to your specific industry conditions. For example, in a period of global economic downturn, it is more effective to look at ways to decrease costs than to increase sales.
Identify your strategy
Your business plan will also include your business strategy and will outline the steps you plan to follow to achieve the goals and objectives you have identified. This, in turn, will direct the day-to-day operations of your business. Each of your business goals will need a plan of action that must be followed to achieve the objectives.
As a rule of thumb, your strategy will outline the most practical and cost-effective way to achieve each objective. It will detail any extra equipment or personnel that might be required to achieve this.
For example, you might need an extra staff member and an additional computer to increase output by 10% within the next six months, or you might consider enrolling your sales staff in a course to achieve the objective of increasing sales to existing customers next year.
Forecast the financial implications
The financial implications of your goals and strategies will be reflected in the financial forecasts in your business plan. Your goals will identify the areas for improvement, like an increase in sales or a reduction in costs, and your strategy will identify any additional expenditure needed to achieve these goals.
Most business plans will include a 12 month cash flow forecast, a profit and loss forecast, and a two or three year projection.
Your cash flow forecasts will identify whether you have sufficient financial resources to implement your plans immediately, or whether you will need to explore other financing options. Monitoring your actual spend against your projections is a way of ensuring that new project costs do not escalate much beyond planned expenditure.
Review your business plan
Your business plan is a living document that grows and changes over the lifespan of your business. Its objective is to identify your key goals and how to achieve them, while taking market and technological trends into account.
The effectiveness of your business plan as a management tool depends on you referring back to it as a reminder of your plans and objectives, and updating your plans to keep them relevant.
Reviewing your progress against your business plan, on an annual basis, is a good way to measure actual performance, and will form the basis for revising and updating your plans.
If you need help with your business planning call us today on 9204 3733 or Contact Us – we will be happy to help. We can also offer our Management Consulting service which our clients find very valuable for Business Planning in Perth.
www.business.gov.au have some great tools available for download that can guide you in writing your business plan, though expert help is always advised.