Business Plan for an Ongoing Business

Completing an annual business plan can enhance the success of a business or non-profit organization.

Business Failure Rate

The failure rate of new businesses is high. US Census data tracked new businesses and found that after one year 25% had failed and by year ten 71% had failed.

Reasons for an Annual Business Plan

• Funding - Investors and lenders will require a business plan. It demonstrates a formal level of seriousness. It will answer many of the questions investors and lenders will ask.
• Operational Guide - A business plan will act as an operational guide, blueprint and roadmap as the organization navigates each new year with new challenges. It stands as a reminder and fallback to the annual goals as management and employees become immersed in the day to day.
• Scenario Planning - The reasons for business planning are the same as why all sports team practice before competing with other teams. While it is just practice and the real game will be against a competitor and new things will happen in the game, the discipline of practice allows the sports team to prepare for multiple scenarios and be ready for unknown challenges. It's a way of practicing for the future.
• Alignment – A business plan and its components can be utilized to get everyone on the same page, understand the vision, mission and strategy of the company including investors, lenders, managers and employees. This especially true if the business plan alters or sets new directions for the organization. The business plan can be the basis of communication within the organization to get everyone on board with new goals, strategies and tactics.
• Focus – It will help answer many key questions and focus the business (which may change over the years)

• “What business are we in?”
• “What is our secret sauce?”
• “Who are our key competitors and what makes us different?”
• “What is our strategy and our differentiator?”

Annual Business Plan Processes

Gathering Data - The annual business planning process is an opportunity to stop and gather data about the organization and other pertinent areas - the competition, changes in the environment effecting the organization, future forecasts etc..

Evaluating - Reports comparing the plan versus actual results can provide important information on strengths and weaknesses

SWOT Analysis - the process of an internal assessment of the strengths, weaknesses of the organizations and the external assessment of the threats and opportunities facing the organization can enhance the business plan quality and utility

Employing an outside consultant - An outside consultant can be helpful for several reasons.

• First, the management and organization can learn more about business planning as the organizations grows and becomes more complex.
• Second, their are many ways to do business planning and finding a fit is important.
• Third, outside resources allows management to focus on the substance, time to think and analyze and listen to others in the organization versus being bogged down in managing the process and begin the scribe.

Resources

Free online business planning resources:

• Building a Business Plan – New SBA Online Tool

• SCORE is a nonprofit supporting small businesses and has a free downloadable business plan guide

Business websites that provide business planning tools are:

• Center for Business Planning

• Wicked Start

• Business Owner's Toolkit by BizFilings

Books:

"How to write a great business plan", by William A. Sahlman, Harvard Business School Press, 2008

Author

The author of this article is Terry Gardiner.

Terry Gardiner is the founder and President of Silver Lining Seafoods and NorQuest Seafoods - a medium-size Alaska seafood processing company; and currently a Board member of the Anvil Corporation, an employee-owned company specializing in oil and gas engineering.

His co-operative experiences include member director of the Commercial Fishermen Co-operative association; creation of legislation for the Alaska Commercial Fishing and Agriculture Bank; and advisor to the US Dept of Health and Social Services for the state Health CO-OPs.

Terry served ten years as a member of the Alaska House of Representatives -several legislative committee chairmanships, Speaker of the House, Chairman of the Alaska Criminal Code Commission and board member on various state and federal boards and commissions.

His non-profit experiences include National Policy Director for the Small Business Majority in Washington DC; working with the Herndon Alliance and ForTerra.

Terry authored the leadership book, "Six-Word Lessons to Build Effective Leaders: 100 Lessons to Equip Your People to Create Winning Organizations".

For more check: Terry Gardiner Long bio