Why Business Planning Is Important for Your Business Growth
Do you often make time to plan for your small business in your daily schedule? How often do you plan for your business daily? If it isn’t something that you do regularly, then let me encourage you to build some time into your schedule for planning.
Many people think that business plans are only useful for new businesses.
The truth is that business planning offers serious benefits for everybody in business. It doesn’t matter how long you’ve been in business or if you are just starting out.
In this blog post, I share the reasons why business planning is important for the success of your business.
I recommend that you start with high-level planning at the beginning of the year and then go into more detailed business planning every 90 days. Taking time to plan the projects I want to tackle and the areas of my business that I want to grow or improve has been crucial to my own success.
Here are some reasons WHY business planning is important to make your business successful.
Planning is not about creating a document (the plan), although that’s a helpful benefit.
Business planning is about thinking. The value lies in the process that you go through while planning. When you spend time planning, you’ll think about your business in many different ways that you may not have thought about before. You’ll look at it from different angles and perspectives and consider the actions you want to take to make it successful.
“Plans are worthless without the planning process… planning is everything.”
- Business planning helps you focus on the right and important things.
When you go through the planning process, you’ll decide what’s important and what isn’t important for your business. This is greatly helpful when you get into the day-to-day activities. With a clear plan, you can focus on what’s most important rather than spending time trying to figure out what you should be working on.
This is much more efficient than trying to decide what to do every day. When you do that, you generally spend your time putting out fires—dealing with the most urgent things on your plate.
With a plan in place, it becomes easy to work backwards to create efficient and effective weekly and daily to-do lists. Then you can focus on what really needs to get done each day. And that’s how you reach your goals.
- Business planning encourages you to think outside the box.
If you don’t step back and look at the big picture of your business from time to time, it’s easy to fall into a round of boring daily activities. You run the risk of doing the same things over and over again.
As you plan, you’re going to set goals, right? And generally, those are going to be big goals. Setting a big goal encourages you to think outside the box.
Why?
With a big goal in front of you, you start to think of ways to achieve it. You’ll get creative and think of things that didn’t occur to you before.
- Business planning helps put your subconscious mind to work.
Up until now, we’ve talked about the active parts of business planning, but there’s another part at play. Once you’ve started thinking about what you want to achieve and how you are going to achieve it, your subconscious mind keeps working on the problem nonstop.
While you are busy going through your to-do list, driving the children around, doing your thing, and even when you’re at sleep, you’re busy in your subconscious state working on your plan. How many times have you awakened in the morning with the answer to a big question? Or had your best ideas come to you in the shower? That’s the power of your subconscious mind. Planning just points it in the right direction.
What is the purpose of business planning?
The purpose of planning is to make decisions about the future of your business. The purpose of a business plan is to document those decisions so that you can refer to them going forward or share them with other stakeholders.
- It helps you to establish your strategy.
The main purpose of business planning is to establish your strategy. Everything else in your plan will support the execution of your strategy.
- Business planning will help you set strategic objectives.
Successful businesses set specific business objectives and then track and follow up on their execution. Without objectives, how do you know what you want to happen? When? and how?
Business planning allows you to be strategic and work towards the objectives that will be most helpful to your business.
- Business planning will help you in allocation of resources
While you are planning, you need to allocate resources in a way that will help you achieve your strategic objectives. What services do you already use to keep your business running? Are there new services you need in order to grow your business?
Also, think about assets that you may need to acquire or replace this year. Do you need a new computer or printer? What about software? Or maybe photographic equipment or a new cell phone.
And of course, as a solopreneur, your most precious resource is your time. Where will you spend it? Do you need to hire help?
The business planning process can help you clarify your thoughts about how best to allocate your resources.
- Business planning will help you decide what NOT to do
Just as important as choosing what objectives to pursue is deciding what NOT to do is also very important. You can’t do everything. There simply aren’t enough hours in the day. You have to decide what to let go of. Making realistic decisions about what you will and won’t do is an integral part of the business planning process.
What should you include when making a business plan?
There are certain elements that you’ll want to include in your business plan. Keep in mind, however, that this is your plan. If something doesn’t make sense for you and your business, it’s okay to skip it.
Your vision & mission for your business
Your vision and mission set a strong foundation for your business. Vision and mission express why you do what you do. They help you attract the right kinds of clients, keep your business focused on the right path, and get you through tough times.
Do you have a vision statement and a mission statement? Vision and mission statements are a great way to start your business plan. They’ll help you keep your eye on the major things.
How is your business monetized? Do you sell physical products? Digital downloads or e-courses? Are you a service provider?
Which revenue streams are working well? Are there any that you want to drop? What about new revenue streams that you want to add to the mix?
A competitive analysis of your market. Do some basic market research. Figure out who your major competitors are, who they sell to, and what they offer.
It’s always helpful to know
what competitors are up to.
And next year, when you do your annual planning, you’ll be able to make a comparison. Have your competitors changed? Who is new in the market? What are the hot new products and services?
It’s always helpful to know what the competition is up to.
A quick SWOT Analysis
A SWOT analysis sounds technical, but it doesn’t have to be. Grab a big piece of paper or a white board and divide it into four parts. Then brainstorm your strengths, weaknesses, opportunities, and any threats your business is facing.
A SWOT analysis will make your business strategy stronger because it will ensure that you’ve thought about both internal (strengths and weaknesses) and external (opportunities and threats) factors.
What are your high-level goals?
For annual goals and objectives, it’s best to stay at a very high-level. This is not the place to go into too much detail because priorities and activities are likely to change throughout the year.
Include a few high-level, “must-do” goals in your business plan. These will likely include your revenue goal and a few other specific targets that you want to achieve.
What is your marketing strategy?
Marketing is an important part of your annual business plan. How are you going to market and promote your business? Do you have a social media strategy? Will you use paid advertising? Or public relations?
Include some information on your target market or your ideal customer. It can also be helpful to decide if your primary focus will be on acquiring new customers or on selling more to your existing customers.
Depending on your business, you may want to have a separate, more detailed marketing strategy document. If so, then you can simply include an executive summary of your marketing plan in your overall business plan.
Action Items to achieve your goals
Your business plan should include the specific actions that you will take to reach your goals. This is when you start talking about the smaller details. What are you going to do? How? When? Where? With?
For a deeper dive into what you should include, check out this post on How To Create a Strategic Business Plan.
Your business plan is a strong and very important document.
At this point, I hope you can see the importance of a business plan. Keep in mind that your business plan can always be adjusted. It’s not final! You can change it or add to it. The plan itself isn’t the end-goal. The strategic planning process is where the true benefit lies.
If you are ready to create your own strategic plan, then be sure to download this free business planning workbook:
Author: UGOCHI
Women empowerment, encouragement, motivation and mentoring. We take bold steps each and everyday to become better.