Employment Hero

5 Steps to Refresh Your Business Plan

When you launched your small business, all bright eyed and bushy tailed, no doubt you pulled something together that resembled a business plan. You may have downloaded the Australian Government’s Business Plan template , or simply jotted down a big goal to keep you motivated. Perhaps, your business plan exists entirely in your head. 

Either way, from where you stand today reflect on how far your business has come and the lessons you’ve learned along the way, if the goal post has moved – it’s time to refresh your business plan. In fact, even if the goal post stands firm, taking the time to refocus and plot your next move is guaranteed to be a valuable exercise. The good news is, it doesn’t have to be tedious! In fact, we recommend just five simple steps.

 

1. Cement your VVP (Vision, Values & Purpose) 

With experience under your belt, now is the time to define (or redefine) why you’re in business.  As a business owner, your ability to effectively communicate a vision is critical. It provides a roadmap for you and your employees, bigger than any day to day task. Harry Beckwith once said, “People don’t lead, purposes do”. So, to define your vision, start with what gets you up in the morning (hint: it’s bigger than money). Your vision should be big, bold, stated in no more than one sentence and written in simple language. Some well-known examples are: 

  • To experience the emotion of competition, winning, and crushing competitors – Nike 
  • To make people happy – Disney 
  • Creating “wow” experiences – Pulse220

Your vision should be firmly grounded in your business values. Values are there to guide your entire organisation; from how employees treat your customers, to each other. Often, these are reduced to overcomplicated corporate nothings that no one remembers, let alone puts into action. Sound familiar? 

A great way to identify authentic business values that will genuinely underpin the way you operate, is to look at your own. Think about three people in your professional (or personal) life that have made a positive impact on your career. Now, write down all of the qualities that you admire in those people. Next, look for commonalities. You’ll soon recognise themes, and in turn, a set of 3-5 powerful values that resonate.

 

2. Identify your Unique Selling Proposition

It’s likely that before you even started your business, you saw a need; a gap in the market that no one else could address quite like you could. Perhaps you noticed a demand for a cocktail bar in a small rural area, so you eagerly opened your doors and started mixing. Now that you’ve been in business for a while, take a moment to reconsider your unique selling proposition. Using our example, perhaps it’s not so much your cocktails that makes you stand out, but the “city-experience” you offer moments from home. This is the kind of learning that only time and experience can garner, and it’s pivotal to your business plan.

The key here is to really look at what you’re doing differently that sets you apart from similar products or services in the industry. A few starter questions could look like:

  What is something you offer that is totally unique in the area you’re selling it?

–     Do you provide a promise or guarantee of sorts? How is this different from other businesses in your industry?

–     Does your product have a particular look/ feel/ taste that can only be found in your business?

–    Are there levels of customisation or personalisation that are totally unique?

You can answer these questions yourself, or better yet, ask your existing customers to answer them for you. You might be surprised at the answers they come up with! 

 

3. Refine your target market

As your business grows, narrowing down who (or what kind of customer) you need to be targeting will be paramount to your success. This will not only help improve your product or service offering, but guide the way you communicate across all promotional activities. 

Refining your target market is the practice of really getting inside your customer’s head; understanding their motivations, aspirations and interests. Often referred to as segmentation or defining your niche, it’s the second most important component to a solid business plan. Consider your customer:

  • What age, income bracket and education level they belong to?
  • What are their core values? What are some of their beliefs and attitudes?
  • What level of quality do they shop for? Is it handmade, premium or economical?
  • What country, city or neighbourhood are they a resident of?

What you’ll start to notice is two-fold. First, you’ll build a picture of who your customer really is; from how they speak to what they like to do for fun on the weekend. Second, you may find your actual customer is a little different to your assumed customer (or the customer you thought you’d attract when you launched your business). That’s powerful!

 

4. Set a 5 year target  

You’ve got your direction firmly in place, now it’s time for the nitty gritty. How will you put all of this into action? Well, with a big, hairy audacious goal (BHAG), that’s how. Start big-picture, and work back from there. Ask yourself, where do I want to be in 5 years time? Take the time to really consider what your business will look like from your product offering to your staff and even your location. Your objectives should be SMART:

  • Specific:  When thinking of a goal, make sure you’re not leaving any room for guess-work
  • Measurable: Anything long-term should have a way it can be measured – This could include how big you would like the business to grow in number of employees, profit or results
  • Attainable: Is your goal realistic? Dream big, but account for execution 
  • Relevant: Do your goals line up with your niche, selling proposition and purpose? 
  • Timely: Any good financial and business plan will include specific dates – jot them down

Once you’ve outlined the long-term vision, split your business plan into manageable milestones. Consider what you’ll need to achieve in Year 1, Year 2 and so on, to ensure you reach your five year target. The trick is to not overthink it. It’s a game plan, not a to-do list. 

 

5. Review your business structure 

Outside of who, what and why you’ll be going about getting your product or service to market, one of the most important decisions you’ll make about your small business will be the legal structure. It’s not only critical to the way you’ll operate day to day, but a business structure will affect how much tax you pay, how much paperwork is required and what type of personal liability you will hold. 

However, your business structure is not something you can set and forget. As your business grows, your legal and financial needs will change. That’s why, when refreshing your business plan, it’s advisable to seek legal counsel on the pros and cons of different entities. Let’s define what these could look like:

  1. A Sole Trader: This is the simplest and cheapest way to set up a business, and allows complete managerial control to the sole trader/owner. You’re legally responsible for all aspects of the business, including debts and losses. As a sole trader, you’re responsible for paying your employees as well as your own super. 
  2. A Partnership: In a partnership, you share the profits, debts and losses with a group or partner, as well as sharing the income. Quite inexpensively set up, partners share control of all business decisions. A written agreement is advised (but not required) here in order to clearly define how profits and losses will be distributed, if not evenly.
  3. A Company: Run by its directors and owned by its shareholders. Initially, companies require higher set up and administration costs, which come with higher reporting requirements. Companies are regulated by the Australian Securities & Investments Commission (ASIC).

 

Plan your work, and work your plan

The end goal? Success. It’s every small business owner’s dream. For you, that might be passive income (kicking your feet up, sipping on an icy cold mojito), a loyal customer network or a business that runs like a well oiled machine. Whatever success means to you, a well-considered business plan will get you there. 

However, a business plan is not a static document! Keep it fresh with our five simple steps. Remember, start with the big picture and work your way back. The fundamentals will always remain the same – why are you in business, what do you do that’s different, who are you targeting and how will you get there. 

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