The old saying ‘if you fail to plan, you are planning to fail’ has never been as relevant as it is in today’s fast-paced business environment, where change is constant and competition is fierce.
Despite widespread acceptance that planning provides a valuable focus for an organisation and gets people pushing together in the right direction, many businesses continue to overlook the importance of it.
In fact, recent figures from market research company DBM Consultants highlighted that 77% of Australian businesses don’t have a plan in place. This is likely to be the main contributor to high failure rates among Australian businesses in their early years, in particular, small to medium-sized operations.
Why planning is important
As well as providing focus and direction to your business, a plan helps you clearly identify your business goals and how you will set about achieving them while considering all the potential resourcing requirements and roadblocks you may face along the way.
At the same time, a plan is going to give you the opportunity to step back and look at what’s working in your business, and what you can improve on. Involving employees in the planning process is another way to gain valuable insights.
Remember that planning is also going to be vital when seeking finance for your business. Lenders and investors aren’t going to risk their time and money if you don’t have a roadmap showing how you’re going to be successful and profitable.
How often should you plan?
Ideally, planning should be done on an annual basis, so you’re continually checking-in and reviewing the last 12 months, as well as re-setting your focus for the next year.
The new financial year is a good time to undertake planning and review how you’ve performed – what worked well and what didn’t? Did your business stay on track with your previous year’s goals? What threats and opportunities did you face?
Undertaking an analysis of your businesses’ strengths, weaknesses, opportunities and threats (known as a SWOT analysis), will help you create specific and measurable goals. You don’t have to come up with a long list of items for each, but between 5-10 key points under each of the main banners will give you a good snapshot of the landscape for your business in the next 12 months.