American Stephen Covey knew a fair bit about being successful in business. Amongst other achievements, he was the acclaimed author of ‘The 7 Habits of Highly Effective People’. He was also a huge advocate for the importance of planning rather than mere goal setting. “Stop setting goals. Goals are pure fantasy unless you have a specific plan to achieve them,” he once explained.
We couldn't agree more, especially when it comes to running a business. After all, a good business plan can help to secure finance, shape the direction of your business, guide decision-making and create strategies that will ultimately steer you closer to achieving your goals – whatever those goals happen to be.
While business planning can undoubtedly seem a big task, it’s almost always time well spent – for it’s the backbone of your business. Get it right and the operation and strategic direction of your business will be a much clearer and smoother ride. Attempt to make do without a business plan and, sooner or later, the bumps in the road may be enough to completely derail you.
There is really only one rule in business planning – have a plan! If you’re not sure how to go about it, the New Zealand Government provides simple templates to help you get started. You can also engage a business professional to assist you.
Regardless of how you do it, the process of creating your business plan can be hugely beneficial and enlightening. It will guide you through the necessary questions and decisions you need to consider for your business – including some you perhaps hadn’t thought of before.
To kick things off, here are some things worth thinking about as part of your business plan:
- Engage the Professionals
From the start, make sure you have a trusted and proficient lawyer, accountant and insurance broker – they will be your new best friends (they cost you money but are worth every cent). They can guide you through setting up your business correctly and can save you a lot of future hassles.
- Choose your Business Type
Are you a sole trader, partnership, trust or a company? Your accountant can assist you in choosing the right structure for you.
- Register domains and your Intellectual Property
If you are planning on having a website, register your domain name. You can do this quickly and easily yourself and host within or outside New Zealand. Once you have an established name and logo, this becomes your Intellectual Property (IP).
- Permits and Licenses, Rules and Regulations
Research your industry and what licenses and permits relate to your business. Apply for them. Don’t think you can fly under the radar as it will always catch up with you and could be a very costly mistake down the track.
- Organisational Chart and Responsibilities
Set out who belongs where in your organisation and the flow of responsibility and reporting. Define key personnel required and the skills necessary for their position. This will assist in hiring down the track.
- Define your Products and Services and their Place in the Market
What do you offer and how much will you charge for it? What is the demand in the marketplace? Is there a gap for your product or are you entering a flooded market? Who are your customers and where do you find them? Defining your place will guide you through your branding and key points of difference.
- Competitor Analysis
What are your competitors offering? What market share do they have? What are their strengths and weaknesses? How do they connect with their customers? How can you set yourself apart from them? What, if anything, might be worth copying?
- SWOT Analysis
A classic marketing tool, a SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) allows you to highlight the pros and cons of your product/service, competitors and the market and then define plans to address them.
- Marketing Plan
Here you outline your overall marketing goals and strategies, plus the types of advertising you’ll use to achieve them. This may include traditional forms of advertising such as print, radio, TV as well as a mix of digital and social media platforms like Facebook, Instagram, Twitter and mobile marketing.
- Budgeting and Forecasting
It’s essential to put figures down on paper. Set start-up budgets including equipment and and capital costs, capital injections required, future sales forecasts, profits and loss forecasts and cash flow projections. This can give you a realistic view of where you’re heading at any point in time.
Business planning isn't a luxury. It’s an essential part of modern business. Sure, it requires times and forces you to consider the big questions relating to the start up and continued operation of your business. But have no doubt, it’s well worth the time and energy to get it right.
Speaking to an insurance broker will assist you to adequately protect your business in the event of any misfortune. They are specialists when it comes to business insurance and make it their business to understand yours. Find your local broker to address one of the steps in your business plan today.
General Advice Warning
The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.