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Why a business plan is a waste of time, but you should do it anyway.


Anyone who sat through a business studies class in school, or a basic business course will have sat through someone talking about why you should do a business plan. And a quick Google of "business plan" or "business plan template" will provide an incredible number of useful links and tips. The only problem is, that same Google search has just as many, if not more, links to articles about why writing a business plan is an absolute waste of time. The main reason they are usually considered a waste of time, is that they are not taken seriously and once completely are never looked at again. So, should you bother with a business plan?

It depends.

Don't worry, this article isn't going to sit on the fence! We firmly believe it is worth going through the process of writing a business plan in some form. It is the process, rather than the end result, that is important. Sure you can spend half a day ensuring the borders are just the right thickness to match the style of font, but lets face it, no one cares.

So who would not write a business plan? Someone who has a laser like focus on the strategic direction of their business. They understand and capitalise on what their strengths are and have systems in place to compensate for their weaknesses. They are out there hustling, building and growing their business and they hit hurdles, but they are able to push through it. They stay on course to the bigger picture of what is true for that business. Can you see where we are heading with this? They already have an internalised business plan, they just might not realise it.

Lets take a moment to consider that. Looking beyond the pages and pages of information that more often than not are printed and put away never to be seen again, fundamentally a business plan is just a formal statement that sets out the goals and objectives of the business, and how it is going to achieve them.

It is of particular importance for a new business to ensure that the day to day actions align to the goals of the business. We see it far too often small businesses and in particular "solopreneur's" change direction in marketing, social media channels and style, trying to keep up with the latest trend. The brand needs to stay true, and this can be difficult without sitting down, and taking the time to put down on paper who are your customers, how can you add value, and what will differentiate you from your competition.

It also useful to review annually for all businesses regardless of size. Big businesses typically do this process well because they have to. With large numbers of employees, if management cannot communicate the direction of the company, then the compounding effects can be crippling to the culture. This doesn't always happen, or a planning review (in a broad sense) may occur but is not communicated well, then the same result occurs. The integration between the review of the business plan and the subsequent communication to employees cannot be understated, regardless of whether you have one employee, or one hundred. To stay on the front foot in business, you need to know what direction to move. Writing and regularly reviewing the humble business plan is a simple and effective way to keep your business focused and achieving goals.

The barriers of entry to start new business have reduced which means there is increased competition across the board. Those that plan, execute, and review, will be the businesses that succeed most often. Is a business plan one of the most underrated and misused tools in business? We think so.

Resources

The Government has provided some great information and the business plan template provided in the link below is a great start for any business considering writing a business plan, or using it as a mental checklist of issues to consider when starting or running a business.

©2020 by Wyrd Accounting. Liability limited by a scheme approved under Professional Standards Legislation.

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