You don’t have to be a visionary entrepreneur to understand that a business plan is vital for your success. And with the new year just getting started, now is the time that many marketing agencies look at the year ahead and begin to ponder what the future holds.
But while dedicating time for forward-thinking is a good idea, understanding that planning is a whole year process (and more than a finance plan) is important if you want to be successful.
What is a business plan?
A business plan is a formal document containing all the goals of a business, the tactics they plan to use to attain these goals and the timeframe for the achievement of these goals.
It may also describe the nature of the business, give some background information on what the agency does, give the financial situation of the business and list its financial projections, and detail any strategies it intends to implement to achieve its aims.
In basic terms, a business plan is a road map for the business that gives it direction.
Why so many business plans fail
There are many reasons why a business plan may fail, from unrealistic expectations to inflexibility. Let’s have a look at a few in a little more detail:
Not having an all-year-round strategy
I hope that all agencies plan ahead to a certain degree. But how many have a plan that is both flexible, adaptive, and re-visited throughout the year? For most businesses, creating a plan of action is a once-a-year occurrence, like setting a new year’s resolution. But just like new year resolutions, business plans are often too rigid, too short-sighted, or too unrealistic in the first place, and lack the depth to outline HOW the plans will be delivered. To stick with the resolution metaphor, it’s ok to announce that you’re going to lose a bunch of weight this year but without a strategy outlining HOW you will lose the weight, it is likely to just remain a failed pipedream.
In business, setting lofty goals once a year seldom works. Stating that you’ll increase productivity by 10% without taking into account staffing fluctuations or saying that you’ll sell £x by the summer without realising that this is a quieter time of the year, will only lead to failure.
A good business plan will offer both short-term, medium-term, and long-term strategies which are both flexible and adaptable when necessary. But even more importantly, it will have designated review points where goals can be assessed and amended, based on what you know today that you didn’t know yesterday.
Not planning for every eventuality
To say that last year (2020) was a hell of a year would be an understatement. Even the most prepared business couldn’t have foreseen the issues faced. But the question is, should they have? Yes, COVID-19 was a bolt from the blue, but if your business isn’t prepared for every eventuality then your plans are essentially pointless.
Disasters happen all the time in the business world. Economies falter and the bottom can fall out of any market at any time.
If you want your business plan to work in any economic climate, then it must plan for every eventuality, and that means making your plans nimble and dynamic rather than casting them in stone.
Too narrow focus
If your business plan only focusses on a few areas of your business, then it simply won’t be comprehensive enough to be successful. For many businesses, money and staffing are the two main priorities when looking at the future. And while revenue/bank balances and staff are important, they are by no means the only things you will have to think about in the future.
For your agency, it’s important to factor in things like your products/services, your target customer, your comms strategy, and the systems and process that underlie your ability to grow.
Overly ambitious financial projections
For a business plan to be successful it must have realistic financial projections. Projecting too much revenue will lead to shortfalls and not taking into account costs, including things like staff pay rises and the increasing costs of materials, can see your business plan fail at the first hurdle.
Failure to delegate
We all need to focus on our special ‘superpower’ and yours as an agency owner, is to create the vision, share it with the whole organisation and ensure it is delivered.
However, if you are constantly sucked back into client delivery and stuck on the client service hamster wheel of doom then you will never have the time to deliver the plan.
This is an issue that many agency owners face since clients want them to work on their account. So if you want to ensure you deliver your vision for the year you need to delegate.
I’ve included a link to one of my popular e-books on best practice delegation. You can grab it here.
What you need to include in your business plan
One way I like to think about a business plan is as a journey that you and your team will go on over the coming months and years.
Look at it like planning a trip to the south of France. Think about all the things you need to take into account to make sure your journey is successful. What is the end goal (getting to France)? How are you going to get there (car, train, plane, ferry)? What are the costs of getting there? What pitfalls might befall your journey (getting lost, car breakdown)? Are there times where you might need to revise the plan (stopping for children to go to the loo, extra costs for food)? Think about every eventuality and plan for it.
A business plan is no different and the questions are the same. What are your goals? How are you going to achieve them? How much will this cost or how much revenue will this generate? What could go wrong? If you have answers to these questions, then your plan will be more accurate and have a better chance to succeed.
Knowing where to start with a business plan can be one of the hardest parts of the process. To help you get started, here are a few things to think about when creating your own business plan:
A vision for the year
Every business plan needs to set out the vision for the year. In simple terms, this is the part where you state where want to be by the end of the year. If we take our trip to the south of France analogy from earlier, then the vision would be the destination: that is getting to say, Cannes. In your agency, your vision may be to attain a specific client or to move into a different type of marketing, launch a new service or break into a new market. Or it could just be to increase revenues or increase your market share. The vision is the goal.
Strategy for each quarter (or another specified period)
If the vision for the year is the end goal, then the strategy will be the road map for how you will get there. When setting out the strategy for the year the steps must be broken down into deliverable chunks with realistic time frames. If we return to our trip to France analogy, the strategy for getting to our target location, Cannes (our vision) would be to work out how we are going to get there. Should we take the train? Can we drive? Would the ferry be a cheaper alternative but take longer? Can the journey be split into different chunks, for example, a drive to Dover then a ferry before a train to our final destination?
In business, the strategy for each quarter should give an overview of the goals for that period and how these contribute to the overall vision. It should be detailed enough to know what you need to do at each stage but they won’t dive into the minutiae of the plan. It’s important for this part of the strategy to understand the need to be flexible and the strategy should account for changes in the market and other eventualities.
A detailed plan for each month
So, you have your vision, and you have your strategy for each quarter giving direction on how you will reach your end goal. What you don’t have is the details of how each stage will move you further towards your aims. To finish off our trip to France analogy, this part of the planning process will look into the minutiae of your strategy. What train are you going to catch? Which hotels will you stay in? Where are you going to get food? How will you combat issues like car breakdowns etc?
In business, the plans you set out for each month will give specific targets that need to be achieved and details of how they can be attained. It will explain what needs to be done and how any issues that arise will be combatted.
A detailed plan for each month will not only set out a road map of where you are going, but it will give you a way to come back to the plan at regular intervals to review and adapt as necessary.
A business plan is vital for any agency. For it to be successfully delivered it’s equally important that your plan is realistic, adaptable, and easy to monitor, especially in difficult times like we find ourselves in right now. If you follow some of the tips set out above and avoid the pitfalls we mention, then nothing will derail your goals. Not even a pandemic!