I am often assured that a professional business, such as a consulting firm has a business plan and when I ask to see it, it often isn’t a business plan.
Instead, it’s an income and expense budget with a cashflow forecast. In other words, it is what banks ask for when considering a loan application, such as Start-up loans for access to finance and something small businesses ask their accountant to prepare, for no other reason than for a loan application.
Often when I ask the business owner which actions are aligned with the business plan to achieve the forecast numbers, I usually get a shrug of the shoulders, a weak smile and a; “It’s just the arithmetic of the number of clients I think I’ll provide a service for throughout the year”.
So, what should a business plan actually be?
Well, before answering that, consider this:
You have a sole trader client who is a self-employed plumber. In presenting last year’s accounts and tax return, he says to you, ‘I need help to grow my business by getting more customers’. He would therefore be expecting help in certain areas, such as; on how to improve business performance by putting business development plans in place.
You probably wouldn’t recommend a business or marketing plan because you don’t have either of these yourself. And if otherwise, it wouldn’t be the right place to begin anyway.
And because you were unable to help him, he falls prey to a more costly marketing consultant or you lose him to a more forthcoming competitor.
However, if your business already had a good business plan it would have identified your plumber’s problem and how to deal with it profitably. You would have the right suggestions for business improvement and therefore strategies to improve business performance which will address the cause of his lack of customers and cash flow.
Back to the business plan. What should it look like if you are to help your plumber client put some business growth plans in place via a business plan?
A sentence that states 5-10 years from now; what status your business looks to achieving to make it stand out. An example would be; “the biggest/most profitable small local business solutions advisor”
A sentence that states what your business does, who for and to what standards. For example; “we help small businesses to solve problems and grow”
Six statements of which must be measurable and achievable to fulfil the Mission Statement and keep moving towards the Vision:
For example; “All round business/financial advisory services to small/medium businesses”
For example; “Practical solutions at affordable prices for permanent income from every customer”
For example; “Automation everywhere to minimise employment and maximise data”
For example; “A small stable group of experienced people that will exceed planned results”
For example; “a 100% return on total assets”
The approaches I will take to ensure that the objectives are achieved.
For example; “Quarterly market intelligence report on competitor activities”
The detailed steps that named individuals will take by specific dates.
For example; “Eric will set up a CRM (Customer Relationship Management) system loaded with prospects and clients by 30 June 2021”
The expected expenses incurred by implementing the business plan and the revenue receipts as a result.
For example; “New costs of £50,000.00 to get total sales to new customers of £240,000.00 for 2021”
Monthly management accounts showing actuals compared to budget.
Weekly/monthly KPI (key performance indicators) report of pre-sale statistics and trends.
Meetings to agree to corrective actions and changes. If you are an accountant wanting to grow your business and to understand how to add better value to your clients, then please click here.
If you can resonate with any of the above points or need assistance or guidance relating to a new or existing business plan or any other guidance related to your business, get in touch with us today. Please feel free to call and speak to an RBSS Business Advisor on 0333 355 1696. drop us an email, or use the form below. We provide real business solutions for start-ups and existing micro and small businesses.
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