Business plans for established SMEs: why they have never been more important!

A really interesting… surprising… maybe horrifying(?) statistic came to light last week:

2/3 of SMEs don’t have a business plan!

They say intuition, experience and a dose of common sense can get you a long way with running a business which of course is true.

As we know from the successful entrepreneurs, who attribute the humble role of being in the right place at the right time with their success. I’m thinking that familiar question on the ‘How I Built This’ podcast. Luck often plays a huge part in the trajectory of a business!

Back to these 2/3 of SMEs without a business plan. Maybe this mix of luck, common sense had worked until now.

The Covid 19 Shift

In March everything changed.. the rules of business …going to work… the 9-5… habits and routines… Disrupted overnight.  For most of us  this meant a shift change. A multitude of industries, sectors on mass. Never to be the same again

This resulted in many, business owners experiencing their revenues fallen off a cliff. Workplace culture change.  Furlough, remote work. Funds become tighter… creditors on your case, redundancies…

Now the focus shifts to sourcing funds, loans, keeping the bank happy as well as finding new customers or a new route to market. It has meant having to reset the direction of your business. Reassure your workforce. And making some tough decisions.

What you need is a business plan.  Both for you own sanity and to ameliorate and install confidence in those investors and creditors. Customers and employees.

Back to Basics – Why are you in business and what do you hope to achieve?

At this point you might even be questioning why you started your business at all.  Let’s look at that why.

Why you are in business. Any what it is are you aspiring to achieve. Maybe the goal is a revenue value? Maybe a number of stores? International expansion? Solving a real world problem? Or perhaps another philanthropic metric?

Once you know what it is and broadly how you will get there your business plan becomes the tool to inspire, attract and retain the right employees, investors, clients and champions to join you on your business journey.

Strategy and milestones 

In practical terms your business plan is a road map. Your business plan identify your business goals and critically it will tell you what resources you need when. It identifies your strategy and milestones along the way.

Your business plan contains your mission. Helping you prepare and execute the best version of your business. It will inspire you and others. Something to be proud of.

A business that’s already been established a good few years is in a great position to plan. Think about it. You already know so much usually practical insight into..  your customers, your industry, what’s working well, what not so well. For complete start-ups… let’s be honest a business plan is mostly guess work and ambition.  But as a SME business owner you have some real insight and experience from which to build a compelling and highly useful business plan.

The Power of a Plan

Psychologists often talk of the power of writing down your personal goals. Your business goals are no different. Studies have shown that companies that PLAN grow 30% faster than those that don’t plan. Furthermore, another study found that of companies with over 90%  year on year growth, 71% had business plans.

Now you see having a business plan for your established SME is a critical tool.  Back to the role of luck in business success. Luck is what happens when preparation meets opportunity. 

A goal without a plan is just a wish and your business, your potential is worth more than that.

Keep following the blog series for more business planning and strategy insights and get in touch if you would like some help with your business!