What do SMBs need to do to get their business plan right?
As small and mid-sized businesses (SMBs) should know, there are several first points of contact vital to make the right initial impression. In my thirty years as a business advisor, I have seen countless SMBs get these initial points of contact wrong. And if aware of them, SMBs still do not correct them. Many of these businesses are in the technology sector.
There are five main basics; telephone answering, business card, website, first meeting and business plan. The last one is, by far, the most important. Especially in the initial stages of business set-up and expansion. In this blog article, we cover how to put together a business plan. The right way.
The problem with typical business plans
A typical business plan being drafted by an SMB will at most have two authors. The vast majority will have just one. In fact, on a percentage basis of 10k plus advised clients over the last 31 years, I would say 98% of plans are by sole authors.
The problem is that the people and organisations (including banks and alternative finance providers) SMBs are sending their plans to will break the plan down into sections and get a team of four or five experts to review each section and feedback to the main decider.
So, when the client meets with a bank on a one-to-one basis, often they will be having to face third-party questions from at least four experts who have listed their respective thoughts and used the main decider as a conduit for their respective concerns and views.
I am still surprised at the lack of knowledge SMB owners have when it comes to the financials such as cash flow projections and planned pricing. As well as to sales/ marketing, when plans are made on supposition, not on fact.
Dragons Den ready business plans
Take a look at Dragons Den, the British TV show. The two fields that trip up the applicants are always financials and sales. Often, the founders will be reliant on their accountants to produce the figures. But the accountants will not be present at the meeting to answer in-depth questions on the projected figures. Therefore, significantly reducing the applicants’ chances of success.
That is why it is important for SMBs to seek out advice from experts who can offer the full 360’ feedback to the client. As they have been there, done it and know reality from theory.
Alternatively, SMBs may enrol representatives in workshops to help growing businesses design the right plan for them.