In this article we will see 5 reasons to make a business plan for a company that already exists. If you want to go straight to them, just click below:
- Align strategic changes with the operation
- Define new product or audience strategy
- Plan team-based growth
- Compare investment opportunities
- Attract new members and / or investors
- Here's how to make your business plan
O business plan is an important tool for anyone who needs to model a business. It is very common to agree the idea of modeling to business ideas, that is, companies or products that have not gone out of print. This interpretation is wrong.
We know the importance of modeling a business idea to ensure that the strategy is tightly tied together with the operation. But we can not ignore that existing operations also need modeling, or at least periodic revisions of the planning that has already been done.
Particularly, I usually argue that if the strategy is not going to have major changes, that is, if the company will go a "more of the same" path, the Strategic planning with a good composition of goals and action plans is enough. If the company intends to find new ways to achieve the results, I think it is interesting to think of a Business plan as a whole, covering strategic, tactical and operational.
If you want to understand what a business plan is before you continue, we have an article that best explains the theory behind it.
Check below 5 reasons to make a business plan for a company that already exists.
Imagine that your company only wants to grow by selling more products or services that already exist. You outline new goals based on the prior period, assess whether the team needs to grow and pass on the new goals to the team. It seems to work.
Now imagine that your goal encompasses a major shift in focus on your strategy, as a change of essence of your company. It will not be enough to set new goals. You need to define what this strategy is and rethink the entire operation around it, such as marketing plan, job and salary plan, market analysis to just at that point understand if financially your new strategy makes sense.
We went through this in the LIGHT in 2013 when we decided to stop consulting to focus 100% on the online part of our company. We are going through this again now, migrating our ecommerce model to the education company (yes, comes news out there!).
In these deeper strategy changes, if you do not redesign your entire business model, define which resources will be shared, and which ones are dedicated to each part of the business, think about a new marketing plan and how the financial will work, common fall into short-term temptations, delaying its main strategy.
One mistake we could have made without a well-defined strategy would be to accept an interesting consulting project for the company's cashier, but contradicted the new strategy, and disrupt resource sharing, delaying the growth of ecommerce.
Strategy is also know how to say no!
One of the main reasons you need to make a complete business plan is a change in your product or audience strategy. But what does that entail? Not only the launch of a new product or service, but also the suitability of its products to a new audience, the opening of new branches in unknown markets.
A well-known example of this shifting strategy was when the Copenhagen decided to launch more affordable chocolates. Rather than just tossing them into the store, they rethought the whole marketing plan by creating the brand Brazil Cocoa. They planned to open new branches and had to think about hiring exclusive people for this new project. That is, a whole remodeling of the business was done.
An example of this strategy being made and going wrong was the launch of the Mercedes-Class A. At the time, Mercedes wanted to have penetration in a more "popular" public, but instead of planning how it would be done and research among customers who owned the models luxury cars of the brand, the car was launched, Mercedes came to hear many complaints about the loss of brand status and struggles to today to transform the Class A into a model more appropriate to the attributes of the brand.
When you project a year of high growth, it is very common for some hiring to come before expected revenue gains. Without planning, you end up hiring haphazardly, due to operational pressures, or the demand of area managers. Also, you can not plan to attract the best possible people to the open positions.
The ideal is to start the year with a hiring timeline ready. Of course, it will change throughout the year, but you will at least know the milestones that will get you hired for certain positions.
When is business team worth increasing? And the attendance? And increase the production team? All this will depend on how many trades you have chains, how many customers and the size of the production. Look for those numbers and others in each position before the planned period begins and avoid giving in to the pressures of the operation or the team itself.
For any investment that will be made, the simplest way to compare them is by making a economic feasibility study. This tool is very useful when you have a good idea of the revenue expectations that you will have with the investments that will be engaged in the different alternatives.
The problem is when you are analyzing investments that can totally change your strategy and structure. It's one thing to compare investing in two different fixed income securities. Another totally different thing is to compare open a branch in Brasília or one in Porto Alegre.
You have no idea what the winnings will be for both affiliates before analyzing the market, competition, planning the size of the affiliate, location, size and qualifications of the team, etc. Therefore, when analyzing more complex investments, it is necessary to construct a Business plan complete, not only the economic feasibility study.
Last but not least, if you want to attract new members, be they investors or to work on the operation, they will not stick to looking at the current numbers of your business and your current operation.
Potential investors will be much more interested in seeing your long-term strategy as you see your company in the coming 5, 10 years. In addition, they will want to understand if their growth is sustainable. Does your product or service have differentials that protect your company from competition? When your company reaches maturity, do you already have a background for expansion?
There are doubts that a Business plan can help you much more to respond in an organized and expository way than other tools that comprise it in isolation: strategic plan, marketing plan, market and competition analysis, job and salary plan and financial plan.
Here's how to make your business plan
If you have mastered the theory behind the Business Plan and only need a support tool, we at LUZ recommend our Business Plan Spreadsheet.
If you need to reinforce the theory before putting your hand in the dough, we have a Spreadsheet Package with a step-by-step guide: How to Make Your Business Plan.