business plan

Like most entrepreneurs, John is heavily invested in his own business. For diversity, he also invested in the stock market and he’s pleasantly surprised with how the market has bounced back since 2008. He’s starting to think about retirement, and that means maximizing the value of his business.

But he’s missing the one thing that could help him achieve that more than anything else: a business plan.

Like many entrepreneurs who’ve been at it for a long time, John no longer has a formal business plan; his goals and plans for the business live in his head (and in those of his senior management). To John’s way of thinking, a business plan is for startups; not a company as seasoned as his own.

Nothing could be further from the truth. A business broker recently explained to me that a formal business plan is one of the most important and immediate areas a prospective seller should address in order to build value in the company.

Why? Because a business without a business plan is like a fisherman without a hook. You can run a business without a plan, and you can certainly go fishing without a hook, but you’ll be much more successful if you utilize the tools of the trade. A business plan—especially one that you are following, that produces results, and shows positive projections for the future—adds significant value to your business, both now and when you want to sell it.

Read: One Proven Way to Increase Your Company’s Sale Price

A good business plan demonstrates that you know your business and have predictable patterns of success. It indicates that you have taken time to think about your business and all the factors that go into making it strong. It shows that you’ve made time to work on your business, not just in your business. It is an exercise that should be undertaken or reviewed on a regular basis; when you are a startup, yes, but also when you’re going through fast growth periods, when you are maintaining your business and when you are preparing it for sale.

Many entrepreneurs have used Dr. Kit Silcox’s Milestones program (full disclosure: Milestones is a program I have delivered in my role as a business coach and is sold through my company) as a guide for working through the process of setting up their company to succeed with a well-thought-out plan. Programs such as these offer more than a spreadsheet with numbers that you take to the bank for financing. They challenge you to think about where you are, where you are going and how you set up your business to get there. They provide a meticulous look at the factors that you need to put in place to grow the value of your business.

A business is positioned for success when the senior management team gathers market and employee intelligence, makes good decisions, sets specific goals, creates an action plan and takes stock regularly to assure they are on track to meet their goals—all things that happen when you go through the process of preparing and updating a business plan.

According to Dr. Silcox, a good business plan covers these topics:

  • Analysis. Specifically, this details where the organization’s greatest strengths meet its most important opportunities, as well as where its weaknesses and threats overlap.
  • Values. These are the underlying principles that direct the organization’s behaviour in its dealings with customers, employees and other stakeholders.
  • Mission. This is a single statement describing what “business” you are in. This acts as an affirmation for the organization.
  • Vision. This is a vivid description of the successful organization in the future.
  • Corporate strategy. This is a more detailed statement of what the organization will become in the future, with an outline of the performance targets necessary to achieve the strategy.
  • Market strategy. This is a description of the primary client groups of the future organization and the products, goods and services that will be offered to them.
  • Organizational development strategy. This outlines the processes and systems within the organization that must change in order for the strategy to unfold.
  • Priority goals and champions. These are statements of specific measurable results to be achieved in the next 12 months. Assigned “champions” provide the leadership and accountability for success.
  • Communication plan. This is a description of how everyone will be informed about the strategy, how it is expected to unfold and how they will benefit.
  • Success plan. This is a description of how each major goal will be accomplished. It includes a definitive statement of the goal, the benefits, the milestones (mini-goals) that will occur on the journey and the manner in which results will be measured.
  • Strategy action plans. These are statements of the actions that will be taken, week-by-week, in order to follow the plan and accomplish the goal.
  • Periodic success report. This is a single page in which the champions can report to you on their progress.

Creating a business plan of this nature improves a company at every level of development. It’s a little like staging a house for sale; you’re basically looking at it with fresh eyes and doing all the little things that make it more attractive. Once completed, you might wonder why you didn’t do it years ago so you could enjoy the benefits of the improvements yourself. You might even fall in love with it again and decide not to sell.

Wayne Vanwyck is the founder and CEO of The Achievement Centre International in London, Ont. He is the creator of The Business Transition Coach Forum and the author of the best-selling books, Pure Selling and The Business Transition Crisis. He has been training and coaching business owners for the past 30 years.

More columns by Wayne Vanwyck.

Read: The Secret Reason Most Entrepreneurs Don’t Plan Their Exit

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