Should I write a business plan for my small business?

Should I write a business plan for my small business?

…or “How Continuous Planning Can Propel Your Business in 2021”. Warning: What you are about to read goes against thousands of answers found on Google! 

If you google “Should SMEs write a business plan?”, you will find 29,700,000 results and the first 10+ are filled with titles such as:

  • 8 reasons why it is important to write a business plan for SMEs
  • How to write a business plan for SMEs
  • Business plan templates for SMEs
  • Easy and practical business planning for SMEs 

… and so on. You get the picture right?

My view is that writing a business plan is a complete waste of time, and can even be pretty dangerous for your business as an SME.

There are 3 mains reasons for this:

  1. First and most importantly, I really do not believe that you can write a clever business plan without either some strategic business understanding or without having tested the ups and downs of the entrepreneurship journey. The simple example of this is answering the question “who is your ideal customer?” Without actually kissing a few ugly frogs you will never know which one will turn into your handsome prince. One of the most strategic and defining questions of your marketing becomes pretty obsolete if your answer is purely theoretical. 
  1. Secondly, writing a business plan is such a big job that it becomes a road blocker rather than a guide… I have heard so many times “I have to write my business plan before launching this project; I have to write a business plan before to see if I can hire now…”.  From my experience as a business coach, writing a business plan can simply become a great excuse for not daring bigger.
  1. Finally, we live in a world where the speed of change is far greater than your speed of writing a business plan. Your business’ environment changes constantly, which makes your business plan almost obsolete the second you write the last full stop. 

Carl Schramm, the author of “Burn the Business Plan” sums it up very well in this interview:

“…it seems to make starting a business somewhat like a cookbook. If you do this, and then you do this, and then you do this, the cake will come out okay. And that’s really not how it happens.”

So unless you are going to take your business plan to a VC… please don’t waste your time by trying to write a business plan.

Okay, but what can you do? Do you just open your business and hope for the best? Of course not. 

As Winston Churchill said, “Plans are of little importance, but planning is essential.” 

The new trends for business planning, according to agile management principles, is continuous business planning, which has been developed for the corporate world. 

Having worked in the corporate world for 15+ years, I can assure you that continuous planning is definitely much more difficult to implement in heavy systems with multi stakeholders than it is in a micro-business. Continuous planning is a perfect fit for time poor, multi-tasking, multi-skilled entrepreneurial life! 

Why? Well, the activity of planning allows you to assess 3 main points:

  1. Your current progress (be it revenue, number of clients, projects / products launched / completed) versus your efforts (the time, energy and/or money it took you to get there), 
  2. The barriers to and the drivers of your success, 
  3. Where you want to go next and how you might get there.

Micro-business owners mainly lack 3 things: clarity, focus and momentum. Therefore, it only makes sense, especially for micro-businesses, to invest their time in making the planning a regular activity to re-clarify their directions, regain focus and never lose momentum.  

Great, but how do you do that?

You have 3 different types of continuous planning: yearly, quarterly and monthly planning. I will answer 3 main questions for each type of planning: when you should do it, what your should focus be and what the results should look like… 

Yearly planning

  • When: At the very beginning of the year or ideally end of the previous year.
  • Focus: Defining your vision and goals for the year and the strategic imperatives to get there.
  • Desired results
    • Your main direction and your quantified, simplified goals: this means,  knowing exactly what you need and how much of it you need to get to that goal. One of our members told me once that her main goal for the year was to be able to pay herself enough to take her family on holidays for 2 weeks in the Maldives. The quantified and simplified version of this goal is: I need to be able to pay myself a £16K dividend, which means, I need to make at least £20K profit, which means I need to increase my revenue by 3x.
    • A simple and actionable tactical plan to get to your goals: this means what you need to do, when you need to do it and how will this impact your days? Based on the case study above, the simple question is “What do you need to do differently than last year to 3x your revenue: more marketing, more sales, increased prices…? And how would this impact your day-to-day management of the business? What do you need to do differently and how much of it do you need to do per month / week / day? 
    • Defined priorities per quarter and clearly set KPIs (key performance indicators).

Quarterly planning

  • When: End of each quarter to plan for the next one. 
  • Focus:  Results of the quarter: Did you hit the targets? Where are you at compared to where you need to be in terms of achieving your goals? Why?
  • Desired results: 
    • Analyse the last quarter
    • Keep, tweak or ditch activities depending on their impact on the business.
    • Reassess next quarters’ priorities depending on your performance levels.

Monthly planning

  • When: End of each month
  • Focus: Actions. Have you completed all the actions set for the month?  
  • Results
    • Analyse barriers and drivers to action-taking
    • Reassess targets for next month
    • Develop your to-do list for the next month. 

Like all new habits, developing a continuous planning habit for your business requires commitment and effort. 

And, like all planning activities (whether it’s social media planning, podcast planning, blog planning, financial planning, or cash flow forecasting) when it comes to it, somehow other priorities pop-up like mushrooms and the planning activity is again shoved to the end of the list. 

Unfortunately, procrastinating planning activities is like a doctor postponing all diagnostic exams before treating a patient. It means making decisions without the full picture and advancing blindly in the dark. Your business deserves better and you, as an entrepreneur, deserve to be more in control, thus more confident and serene about the direction of your business. 

This is why we offer members a FREE planning workshop at the end of each month*. Every last Wednesday of the month, you simply dedicate your lunch hour to  gathering virtually with like-minded female entrepreneurs and work on your business. This is how you plan continuously and make phenomenal progress. If you’re not yet a member, don’t worry, you can just pay to attend our next planning session.

*Premium, Mastermind and Power Up members for FREE, Empower Lite members can use their coupon for half price. If you have any questions regarding membership or our events feel free to get in touch.