"In its simplest form, a business plan outlines the goals of the business and the plan to achieve those goals. It should always have some financial aims in there too, which back up the goals and their achievement," says de Silva. "Ideally it would be no more than 'several pages', preferably fewer."
But how do you ensure your words on the page translate into action?
De Silva says for a plan to be really effective you need to prioritise the most important parts of your plan - so you do the right things first. Assigning responsibility for various aspects of the plan to specific individuals, and putting timeframes in place, will also help get things done.
"You need to have regular reviews of the plan and to hold people accountable for delivering on their bits of it. Without accountability, it's unlikely the plan will be implemented properly," he says.
Mark Carley, owner of Auckland-based business Hire Plants, says that all-important task of prioritising is one of the biggest challenges he encounters when business planning.
"I have to accept that I can't get it all done in six months. What also adds to that tension is being in a business of this size that has an operating rhythm that's very day to day," Carley says.
"So I try to make sure at least some time is set aside to reflect on the overall plan - usually at the end of the week. Having simple and defined 'focus areas' within the plan means I can see progress is being made, which provides some reassurance."
But it is worth putting the effort in.
Carley says having a business plan gives him a 'framework' on which to hang his thoughts and ideas, and is helpful when talking with accountants, lawyers and other advisors. It's also a great tool to help communicate the direction of the business with staff.
Dougal Paterson is co-owner of property services firm RAWA and also testifies to the many positive effects of solid business planning.
He says thorough planning helps keep their customers' projects on track, which in turns keeps them with the company for longer periods. Staff also feel more supported because management have a clearer picture of what's going on across the whole operation and can deal with resourcing more effectively.
"We've learnt that by sticking to the plan we've been able to grow the business in the direction we want, rather than going where the short-term opportunities are," says Paterson. "Too often in the past I think we jumped at opportunities that appeared attractive in the short term, but in the end they often just took us off course."
Andy Evans - Guardians and BowWowBox
Andy Evans is the owner of two pet-related small businesses, Guardians and BowWowBox.
Can you tell me a bit about your businesses?
I'm the owner of Guardians, a dog-minding company that specialises in placing customers' dogs with host families in the hosts' home while their owners are on holiday. Guardians was established in 2005, and we've also recently launched a second business called BowWowBox, which delivers a surprise box of treats each month to pet owners.
How do you approach business planning?
Business planning really started during the due diligence phase of purchasing my first business. I had a number of goals I wanted to achieve personally so firstly I wanted to figure out whether the business would help me to achieve those, and having a business plan right from the start certainly helped me to focus on these.
Business planning for me starts in mid-January. It's important for me to create a roadmap for the year ahead and helps me focus on the areas where I believe the business can grow.
What kind of detail does your plan include?
My plan starts with a vision statement about what I'm trying to create, then gives a description of the company and its products and services, explaining what our differentiators are.
Then it covers a market analysis, marketing and advertising plans, a SWOT analysis, cashflow statement and revenue projections, and then a summary and conclusion.
Why is this an important process for you?
What I've found is it encourages me to analyse the business and look at ways to improve as well as look forward and establish goals.
Can you give an example of some of the tangible benefits of doing that?
Through our business planning we got a good understanding of the transactional nature of the business. That led us to introduce our long-stay service where we have customers' dogs stay with us for a year or more. This has been great because it's provided a more consistent source of cashflow and has contributed to doubling our profits year on year.
Things change. How do you keep your plan relevant over time?
That's hard. I've found you need to continually revisit your plan and adapt it as things change. In terms of keeping it relevant, we haven't been scared to adapt the plan when we've seen an opportunity present itself - like BowWowBox - and develop new plans from there.
What tips would you have for other small business owners in terms of
business planning?
It's very easy to lose sight of what you're doing and why you are doing it. When you're working in the business every day it's important to take a breath and look at it from a bird's eye view. That's what a business plan does. It says 'stop what you're doing. Let's have a think and ask some hard questions'.
But I'd also say don't go overboard with your business plan. Keep it relevant, short and succinct. It's better to have a plan that you use than one that never sees the light of day. Try and pick a dozen or so milestones that that you can work on and focus on these.
Coming up in Small Business: New Zealand Fashion Week is in full swing. So what's it like to be a small Kiwi fashion brand with big global ambitions? How are you getting where you want to go? If you've got a good story to tell, drop me a note: nzhsmallbusiness@gmail.com
