They’re not wrong; However, those who oppose the concept of planning for the whole market could miss out on the chance to eliminate wasteful spending, find opportunities, and grow into new markets.
Jonathan Dowden, Product Marketing Manager at the company, advocates for an innovative method of business planning where the bulky static documents are eliminated to provide helpful information that evolves in the same way as the markets they represent.
“For start-ups, it can be quite dangerous to write a business plan,” He declares. “Unless you have data, it’s impossible to know what’s going occur. If you follow traditional business planning, the template is no longer an objective document to help your business but rather something that tries to convince you that this idea will succeed.
“It’s also intimidating to fill out a template articulately in words, with everything you know, especially if you are not used to writing long-form documents – and many business owners will not have done that since they left school or university.”
As per Dowden, the alternative that Dowden suggests is what consultant to business Steve Blank calls ‘customer development. Instead of writing down your potential to proliferate, have large profit margins, and an ardent following, you should answer a few simple questions:
- Who are your clients, and what are their preferences?
- How can you get in touch with them, such as on the internet, face-to-face, or in combination?
- The reason why anyone would want to buy from you?
- What are the activities that will bring in income for the company?
- What are the resources you require?
- Who can help you, such as bank managers, accountants, or suppliers?
- Do you expect to make an income after the costs have been taken out of sales?
“Get the basic thoughts out of your mind and onto paper. Doing this in just a few hours is possible using Post-It notes. You can then test your idea with real customers to determine whether your concept is feasible with a repeatable method for a long time.
“None of this can be solved by filling out the huge form. Beginning with a simple approach, testing, and gathering evidence, you can begin filling out the blank canvas of what’s possible and what’s not,” Dowden says. Dowden.
The benefit of this sandbox approach to business development is that it’s equally essential for FTSE 100 companies as it is for sole traders on their first day in front of the computer. Tech behemoths Google,
Amazon, along with Facebook, has numerous live experiments, most of which have been put on the back burner. The cost of each failure is small, and the ones that succeed usually generate millions of pounds in earnings.
Imagine the business plan as less an outline of the future. Still, it is more of an overview of the principles to help you understand it or as a scientific experiment based on a hypothesis and methods. When evidence is collected, the conclusion is drawn.
According to Dowden, this method is beneficial during times of massive disturbance.
“Imagine that you ran an unassuming business when the pandemic struck. You should first put your business back on the road, look at your sales channels, and think about how you could adapt to the changing environment.
“A Yoga studio can be obvious, but can you make it available online? And, should you, what kind of investment will you require to maintain clients? Perhaps you need a professional Zoom account and higher-quality audio-visual equipment to bring your business online. Each time you come up with an idea, it is best to review this process, mix ideas, and invent.”
In terms of the structure of your plan, you must select a format compatible with your business style. Are you a data-driven person, or are you imaginative? Would you prefer that an accountant build your own, or is it a loss of control?
You could use an ordinary pen and paper or even a word processing file; however, the software can assist you in taking full advantage of the agile process as it is simple to keep track of information and adjust plans swiftly when circumstances alter. Through running reports, you can evaluate how accurate your forecasts are in comparison to what’s happening.
This is where Sage can be of great help, according to Dowden. Dowden: “It’s easy to generate reports that will show the performance of your business. With digital data storage, it is possible to do fascinating things with it, such as planning your business, creating tax returns, or creating P&L reports to analyze cash flow more effectively.
“If you can visualize sales and costs, it’s easier to focus on profit centers and manage overheads, all of which information goes back into planning for the future.”
The most important thing to remember? Don’t view the business plan as a massive permanent document that isn’t changing. Start with the basics, outline your company’s objectives and define goals. If you find something that doesn’t work, you can change it to move in a new direction.