April 17, 2024

Having a solid plan matters. Here’s why:

AUTHOR

Sam Ogle

In this Q&A we chat about why having a solid plan matters, how much detail you really need, finding that balance between financial success and personal fulfillment, and even how to set yourself up for success in the long run.

Q: What is a plan, and do we even need one if we’re a business?

 

All businesses should have a business plan. It’s effectively a roadmap outlining where your business is going to go. It includes your vision, mission, and goals (both short-term and long-term). The key thing about having a business plan in place is that it holds you accountable to what you’ve set out to do. It ensures you’re on track to achieve those goals, which is why you went into business in the first place.

 

It’s also about good management versus good luck. You can’t rely on luck alone; good management increases the probability of success in your business, and planning is a crucial part of good management.

 

Q: How detailed does a business plan have to be?

 

It doesn’t have to be super detailed. Just having something on paper is better than nothing. The key is to include important elements like your reasons for going into business, where you see yourself and your business in the next few years, and setting both business and personal goals. Personal goals are essential, like wanting to take a holiday or spending a certain amount of time away from the business each year. 

 

The plan itself doesn’t need to be overly detailed because you might not revisit it often, but the thought process behind it and the discussions you have while creating it is crucial. We encourage our clients to think deeply about these questions before our planning sessions so we can refine their goals and vision effectively. 

 

Q: Is a business plan all related to financial outcomes?

 

Most people go into business to maintain a certain lifestyle or pursue their passions. It’s about understanding why you went into business, aligning your goals with that vision, and finding a balance between financial success and personal fulfillment. Not everyone wants to be a multi-millionaire; some people just want to do what they love and have a good work-life balance.

 

Q: Who should hold you accountable to the plan?

 

Ideally, it should be your business partner and a trusted advisor like your accountant. Quarterly check-ins to review progress against your goals are essential for accountability and to make any necessary adjustments to the plan.

 

Having your spouse hold you accountable is probably not a good idea. While they’re an important part of your life, they may not always understand the intricacies of your business or may have unrealistic expectations.

 

Q: Plans can be flexible and changed. How do you strike a balance between giving up too easily and not sticking to the plan?

 

It’s essential to distinguish between major changes to your vision and minor adjustments to your strategy. While your business’s overall vision shouldn’t change frequently, it’s natural to make small tweaks to your plan as circumstances change or new opportunities arise.

 

In a perfect world, everyone involved in the business, including spouses, would contribute to the planning process. Sharing the company’s vision and values with all stakeholders, including employees, encourages alignment and commitment to the goals.

 

Q: Should you share your plan with everyone, including frontline employees?

 

Absolutely. While you may not share all the financial details, sharing the vision, values, and key performance indicators (KPIs) with all employees helps align everyone toward the same goals and builds a more robust team culture.

 

Q: Let’s talk about succession planning. 

 

One common issue is business owners only think about succession planning once it’s too late. It’s essential to plan for the future of your business, whether that involves selling it or passing it on to the next generation. Succession planning should be part of your overall business plan and involves preparing your business for a smooth transition when the time comes.

 

Succession planning also includes planning for changes in key management positions within your company. Identifying potential successors and developing their skills ensures continuity and stability for your business. It’s about planning for the long term and ensuring your business can thrive even after you’re no longer running it.

 

It’s never too early to start thinking about succession planning. The earlier you start, the more time you have to prepare and implement your plan effectively. 

 

Ask Yourself:

  • Do you currently have a Business Plan in place?
  • Have you set realistic and measurable goals for your business?
  • Do you possess clear strategies to achieve those goals?
  • Do you regularly review your goals to adapt to changing circumstances?
  • Are you anticipating taking a more passive role in the business or planning to sell within the next three years?