BusinessDesk is proud to publish The Reset series, made in association with our trusted commercial partners and designed to supercharge your business in 2021. In this article ANZ looks at why business planning is the key to success this year.
Mike Tyson may have been talking about boxing when he uttered his famous line, but there are a lot of similarities between blood sport and business. In fact, in 2020, Covid-19 provided just that punch in the face for a lot of businesses, and there is still a whole lot of haemorrhaging.
Whether you have been hit hard, or you managed to duck and weave your way through the pandemic, creating a good plan is key to a promising future. But, taking that plan and using it, updating and refining it for whatever sucker punches get thrown your way is the single most important thing you can do for your business.
So, read on for five reasons a business plan is so important for success and how you can go about getting one ready for the new year ahead.
1. A business plan will focus your people and your resources
With a sturdy plan in place, your staff, investors, stakeholders and family will all know exactly where you’re going and how you’re going to get there. With everyone on board for the ride, conversations are more effective and you’ll all have a better idea of where and how to use your limited resources.
Refining the business plan for the new year means relooking at how you are tracking towards achieving your goals and whether the steps you had mapped out to get there are still appropriate. Key tools to help here are SWOT analysis (Strength, Weaknesses, Opportunities and Threats), break-even calculators and reviewing your marketing strategy.
2. It can help you make decisions
Decision fatigue is a thing; it’s relentless for every business owner. Having a robust business plan is your magic wand for making decision-making easy. Ask: “Will this contribute to my business plan?” – a simple “yes” or “no” and you’ll know what to do.
To do this, write your goal somewhere accessible and obvious, then put it into a catchy phrase so it’s easy to remember. Next, ensure you have a clear outline of how to achieve it – in the short, medium and long term. When you’re refining your plan, re-evaluate the steps you had intended to take to get to your goal. Are they still realistic, do they need to flex or should they be changed completely?
3. A sturdy plan may help with getting finance
Having an up-to-date business plan will help when it comes to raising capital or taking out loans or finance for your business. Usually, a business plan is one of the key things that banks and investors will ask for when it comes to financing. Often, this is the bit that feels daunting, but nowadays there are many tools and resources available to make it simple and easy. See more about how to raise capital for your business on ANZ’s Biz Hub and about how to defend your pricing here. Other useful tools on Biz Hub are cash flow forecasting, profit and loss and break-even point, and charge-out rates.
4. It challenges you to step back and think about your ideas
Perspective is a beautiful thing, but we all fall into the trap of being too close to our business. A common mistake for business owners is to spend all their time working ‘in’ their business rather than ‘on’ their business. Taking the time to do a business plan allows you to step back and look at the big picture – not just what’s happening in your business, but looking at your competitors, your industry, new technology, customer trends, market trends, etc. And having your ideas written down in a structured business plan can allow you to sit back and evaluate them and challenge whether they are the right thing for your operation. A handy way to get started with this is a SWOT analysis (#4 in the business plan template). If you need help getting some perspective, ask friends and staff to do it, too.
5. It will help you plan for the future
Uh, duh… it may sound obvious but a business plan will help you understand what you may need in three, five or 10 years’ time and what you will need to start thinking about now to get there. For example, if you need to invest in new equipment in five years, what can you start doing now to prepare for that cost? Or, if you will need to hire a significant number of staff, will you need to bring a human resources person on board or organise an HR consultant? Your business plan should help make your transition into the future (whatever that may look like) easier.
Don’t take it from us
Chefs Rob Gilbert and Laura Sisson of The Dukes Roadhouse food-truck enterprise in Mangaweka say one of their top tips to fellow small-business owners is to make a business plan. “Even if you think you have the best idea ever, going through the steps can point out things you never thought of, or weaknesses in your plan.” The best thing about a plan is that when you do get a punch in the face, it helps to get you up off the canvas and to come back swinging.
What to do next?
Fill in our handy business plan template and check out ANZ’s online business planning workshop for a full interactive session on how to go about successful business planning.
To chat to one of ANZ’s experienced business banking team about how to bring your plan to life, give ANZ a call on 0800 269 249.
This material is for information purposes only. Its content is intended to be of a general nature, does not take into account your financial situation or goals, and is not a personalised financial adviser service under the Financial Advisers Act 2008. It is recommended you seek advice from a financial adviser which takes into account your individual circumstances before you acquire a financial product. An ANZ Authorised Financial Adviser will, on request and free of charge, provide you with his or her disclosure statement prepared under the Financial Advisers Act 2008. If you wish to consult one of ANZ's financial advisers, please contact us on 0800 269 296.
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