Welcome to episode 33 of I hate numbers. Today's episode why you need your business plan.

In fact, every business needs a business plan. In this episode I'm going to talk about why your business needs a business plan and what should actually go into it your business plan.

This episode of, I hate numbers is part of my continuing mission to strengthen your money mindset, make you less scared of your numbers. So ultimately you can make more money or profit in your business, have more time, sustain your businesses and thrive.

Why you need a business plan

You may be thinking that it's a complete waste of time. There is certainty in your mind that you know what you’re. You don't want to be spending time and energy writing things into a document that's going to be out of date at the moment it’s written.

Put those thoughts to one side. Your business plan is written predominantly for you. No plan equals no success.

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The five key components that go into your business plan.

Firstly. In the beginning figure out what your version of success looks like, your Business goals. Business goals have substance, and must be at least measurable, realistic, and achievable.

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Your business objectives

These are the steps, the journey, the actions, and the tactics that you need to do to get to your business goals. Like your business goals, they must have substance, and must be at least measurable, realistic, and achievable.

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Where your business is now

Your route to success needs you to understand where you are now. Understand where your business is currently. And understanding who your customers are, what the customer journey actually involves, which customers are the most profitable to you.

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Milestones and measures

Manage what you measure. The progress of your journey requires you to set milestones and measures. Then you can monitor your progress and make judgements

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Your Business Numbers

Lastly, the numbers. Translate your plan onto financial forecasts. Look at your plan through the prism of cash flow and profit. Cash flow makes it happen; profit is the prize. Check out episode 30 of I hate numbers podcast episode "Cashflow is a big deal".

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Conclusion

In conclusion,Why you need your business plan is clearer. in your plan, include your business destination, and the steps you must take to achieve your business goals.

How are you going to get that, that detailed plan, your milestones and your measures, and lastly, the numbers. What does that actually look like in terms of profitability? What does that actually look like in terms of cash flow.

Your business needs to grow, serve and make money. Your business plan mindset plays a vital part in you taking your business seriously and for growth.  Contact us to find out more.

 What Next

Make yourself comfortable. Sit back and listen.

Even better subscribe so you do not miss an episode.

In This Episode

• Understanding why your business needs a plan
• What five elements your plan should include
• The importance of milestones and measures
• Developing your financial forecasts in profit and cash terms
• Developing your own Numbers confidence and decisions
• Take more control of your numbers to help make you money, survive and thrive

Links

https://podcasts.apple.com/podcast/proactiveresolutionss-podcast/id1500471288

https://play.google.com/music/m/I3pvpztpjvjw6yrw2kctmtyckam?t=I_Hate_Numbers

https://open.spotify.com/show/5lKjqgbYaxnIAoTeK0zins

https://www.stitcher.com/podcast/proactiveresolutionss-podcast

https://tunein.com/podcasts/Business–Economics-Podcasts/I-Hate-Numbers-p1298505/

You are listening to the I Hate Numbers Podcast with Mahmood Reza. The I Hate Numbers podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza.

Welcome to episode 33 of I Hate Numbers. Today's episode: why you need your business plan? In fact, why every business needs a business plan? This episode of I Hate Numbers, I'm going to talk about why your business needs a business plan and what should actually go into your business plan. This episode of I Hate Numbers is part of my continuing mission to strengthen your money mindset,

make you less scared of your numbers, so ultimately you can make more money or profit in your business, have more time, sustain your businesses, and thrive. Let's get on with the broadcast. The first thing to deal with in this episode is why you need a business plan, why you should bother. You may be thinking to yourself, it's going to be a complete waste of time.

I know what I'm doing in my business. And surely, business plans are only produced for the banks. If I'm going after money or funding, and if I don't need to go after funding or money from elsewhere, then it's a waste of time. I don't want to be spending all my time and energy writing things into a document that's going to be out of date

at the moment it's written. Whether it's in business, whether it's in music, whether it's in arts, whether it's in culture, whatever endeavour doesn't happen by accident, doesn't happen overnight. Underpinning all of that success is a plan, and you need to have one in your business if you are not actually looking to run and grow a business, and not pursue a time-consuming and expensive hobby.

Don't fixate on the actual end document, the business plan itself. It's the journey, it's the process of planning that you are looking to articulate and put into the end document. Use the term document deliberately because if you do not get those ideas that are floating around in your mind, those ideas that you've been thinking of,

and actually translate that into a journey map, into a business plan, all they will do, they will swirl around in your head, and dipping things in your head is no good to you and certainly no good to you in driving your business forward. Business plan and the process you'll be going through brings clarity to your ideas,

brings focus to your ideas. It also represents accountability for you. It makes you think through the customer journey. It makes you think about how you're going to make money and by money I'll refer to profit out of your endeavours. It will show you how realistic your ambitions are. We as humans, we as individuals, do not achieve success in our lives unless we have a plan of how to actually achieve it.

To borrow an RAF adage, proper planning and preparation prevents piss-poor performance. Before we look at what goes into your business plan, and there are five key components that go into your business plan, remember, your business plan is written predominantly for you. It's not written for an outside party, but it's predominantly written for you and your notion of what you want to achieve in your business.

Maybe they're thinking, well, how on earth do I actually know what's going to happen going forward in the future? I've got no idea what I'm going to be selling. I've got no idea how much money's going to come into my business here, and you are perfectly correct in saying that. Your business plan, to a large extent, is a fancy document.

It's a document that's written for you, your business journey, and your business destination. Five key things that you should put into your business plan. Number one, the start point is you writing down what your version of success looks like, and that could be success in 12-months time, in two-years time, or in three-years time.

Typically, a business plan normally goes anything from one to three years. Your version of business success is typically described as your business goals. Now, goals are not just fluffy things. It's not just saying, I wish to be rich. I wish to have lots of customers. That's not a goal. Point is it means different things to different people.

You need to have something that you can quantify. You need to have something that you can actually measure, and something that is also specific. In the idea of being rich, even though it's a very overall broad term, it means nothing at all. So, does being rich mean that you have a hundred pounds in your bank account, or does it mean you have 10,000 pounds in your bank account?

So, goals is your notion of what success looks like. Typically, this goal will include areas such as profitability, business growth, and audience development. Apart from being specific and measurable, your business goals must also be achievable within the timeframe that you've set yourself. So, if you are looking ahead 12 months, are those business goals that you set yourself achievable within that 12-month timeframe?

If you are looking further ahead within two years, the same idea applies. Are your business goals that you've written down, achievable, specific, and measurable within that two year perspective? Example of a business goal that you might set yourself is raise your current net profitability by 20,000 pounds, or by 10%.

Obviously, these numbers are made up. If you are a new startup, set yourself a benchmark, an idea of what that profit target should be, needs to be at the end of 12 months. Having written down your business goals, as a rule of thumb, I would go from no more than three to five business goals. You then need to think about what are called objectives.

Objectives are the steps, the journey, the actions, and the tactics that you need to do in order to get to your business goals. Using the earlier example of a stated business goal of increasing profitability by 20,000 pounds, what we need to then think in terms of is what does that translate to in terms of objectives?

What are the steps, are there more details? So, it could be by increasing our annual turnover by 10%. It could be landing three brand new accounts each month. It could be that we introduce two new product lines by the end of our 12-month forecast. So, that's two aspects of what goes into your business plan.

We've talked about your business goals. We've talked about your business objectives. You need to start for the end point where you want your journey to end, where you want your journey to take you, what your destination is first, and then we work backwards on that. So, we've got business goals, which then translates into what those business objectives are.

The next thing we need to then think about is the actual detail, the route map that breaks it down into how we actually get to our business goals. So, when we talk in terms of increasing annual sales by a factor of, say, 10%, landing three brand new accounts each month, what does that actually translate to in terms of how we actually are going to achieve that sales growth? How we're going to achieve getting those new accounts?

That in itself involves understanding where your business is currently, and understanding who your customers are, what the customer journey actually involves, which customers are the most profitable to you. If we don't understand where our business is at the moment, if we don't understand what goes on under the bonnet in terms of profitability of customers, in terms of the cost base, in terms of how we interact with customers, how we get conversions of inquiries to sales, if we don't understand where we are currently, it's next to impossible to decide how we're going to go forward, how we're going to reach our business goals.

Remember, our business goals are our measures of where we want to be. The fourth element that goes into your business plan, and for me, this is really quite a crucial dimension. What I find is that a lot of people who have got aspirations, they've got ideas where they want to get to, find it very difficult to maintain that motivation, find it very difficult to maintain that journey because they get deflated very quickly.

They're setting their goals up and they're focusing on the end point. They're not focusing on the progress of that journey. So, what you need to do, you need to set milestones and measures. So, when you look in terms of what your endpoint is in 12-months, two-years, or three-years time, what does that translate to on a month by month basis?

So, if I set myself a sales target growth by 10%, what does that translate to in pound-note terms on each month that goes by? Once I've got that broken down into that level of detail, then I can monitor it and see how well I'm actually doing. I can give myself a proverbial pat on the back, or I can give myself a talking to if I haven't quite got where I want to.

And there will be good reasons. So, you need to be able to set many milestones because it reinforces, also, your accomplishments that you're doing, and those areas where you need to work a little bit harder, or perhaps look at doing something differently to what you do. So, milestones are really critical. Let's summarise what we've got so far.

So, we've talked about the whys for a business plan, the reasons you need to have one in your business. Any idea of achieving success without a plan is going to be more fluke and accident than by design. The four things we've said that need to go into your business plan are your business goals, your northern star, your destination point, the objectives, the steps that you need to take, the actions and tactics to get to those business goals.

How do you actually get there? What's that in terms of planning? The things you must do, the things you must invest in, the things you must develop, the milestones and measures to monitor and look at your progress as you are going towards your end destination. And the fifth important ingredient of your business plan

are the numbers. What does that translate to in terms of financial forecasts? And to forecast you need to look at is in terms of cash flow, translating that journey into what it looks like in terms of money coming in and money going out of your business. That translation of your business journey, your business story into a cash flow plan,

that cash flow plan, that cash flow forecast will help you achieve your aspirations. So, the second financial document that you need to look at is your translation of that into profit. How much profit is that journey plan going to result in? Check out episode 30 of I Hate Numbers for the podcast episode,

Cash flow is a big deal. So, let's summarise the main points from this podcast episode. Number one, a business plan. The planning process in your business is an essential, not it would be nice to have. By all means, ignore it if you don't wish to take your business seriously. If you don't wish to have success in your business, then a plan is not necessary.

Five key things that should go into your business plan are your business destination, your goals, objectives, the steps, the journey, the actions and tactics needed to reach your business destination, your business goals. How are you going to get there? That detailed plan, your milestones and your measures, and lastly, the numbers.

What does that actually look like in terms of profitability? What does that actually look like in terms of cash flow? Okay, folks. Hope you've enjoyed this podcast. Hope you've got some value. If you want to check out the show notes and check out the website, proactiveresolutions.com, we've got some resources to share with you on planning, on cash flow, on numbers.

Until next week, have a great week. We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.