A Business Plan: Its Purpose in building a sellable business

Join me as I share this insightful series by Justin Goodbread providing Canadian context and conversation weekly to my LinkedIn Audience.

In the last article in this Building a Sellable Business series, Selling your business....Starting at the End, Article #2 we explained that you can’t begin a business if you don’t know how it’s going to end. You have to identify why you are working before you can figure out how to work wisely. You must recognize the intrinsic value within your business and then work to increase, or accelerate that value purposefully and strategically. And one of the best ways to start that process is by building a plan… a business plan.

Have you ever scratched your head and wondered why some business owners soar? Nothing seems to hold them back from more: more money, more clients, more contracts, more products, more everything. While those entrepreneurs are taking the bull by the horns, other business owners are getting run over by the bull. They can’t get out of the trenches. They’re stuck in the everyday business muck and mire, and they’re getting trampled by the bull.

How Does Bull Riding Relate to Business?

Isn’t the bull a lot like a business? Think about it. We watch friends open a company and ride the bull of business like it’s a tame pony ride. They could be in the most cut-throat, grisliest, meanest market ever seen, and these entrepreneurs are wrangling problem steers and having the time of their lives. They get it all – the cheers from the crowd, the belt buckle, the picture with the pretty girl, the big money.

But then, you’ve got the others – your business owner friends who never reach elite status. They get trampled, and when they’re already down, they’re wallowing around in bull crap. Literally. But why? Why can’t some business owners ever tame the business bull? What gets them caught in the muck?

What Do The Two Owners Do Differently?

When we talk to clients, both the ones who are worth millions of dollars and the ones who are forever in the red, we try to find the answer to those questions. Often we ask them, “If you had it to do all over again, what would you do differently?” Perhaps the most helpful response we've ever gotten came from a buddy of Justin's who owns multiple businesses and is worth eight million dollars. After some thought, he said, “You know; if I could have done it differently, I would have planned better. I didn’t have a clue what I was doing. Somebody told me I should have a plan but just didn’t see the purpose of a business plan. Man, the first six years of my career was just nightmarish, but when I finally sat down and did a business plan, my life came together.”

Inevitably, we’ve seen that the business owners who have the bull by the horns create and follow a business plan. They don’t just write one and look at it 20 years later. Yearly, monthly, and weekly they succeed by tweaking what’s not working to make it work. Their plan is foundational to their success, and it grows with them, flexing with the market and with the individual’s circumstances.

Business owners have to start somewhere. They have to lay the original groundwork for success. Yet, they can’t stop there. They have to test the foundation. Upon re-evaluation, they have to add support to it. They can’t neglect the base of their business structure, or their entire company will crumble.

What is Included in a Business Plan?

Since we've told you that a good business plan is essential, or foundational to your business’s success, you need to know what’s in one. Here is an overview of the basics:

• Company description
• Market Analysis
• Management and ownership
• Service/Product line
• Marketing & Sales
• Funding
• Financial projections
• Appendix
• Business Summary

Justin wrote a comprehensive article about exactly what needs to be in a good business plan, and it’s received all sorts of press. In this article, he dives into every aspect giving step-by-step instructions, and suggestions. Use that article as your starting point if you don’t have a business plan, and revisit and compare if you already have one.

The Purpose of a Business Plan is to understand what you are trying to accomplish within a given timeframe.

In order to grow your company to sell it, creating a business plan at the beginning of your journey AND at the beginning of each year is fundamental to know what you’re trying to accomplish. Not only that, knowing what you want to achieve determines how well you succeed. How do you know you’ve reached your destination if you had none in mind? What determines your business’s success if you’ve never defined success for your business?

Yes, a business plan is time-consuming and frustrating, and that’s not what we entrepreneurs want to hear. We have an amazing product or an incredible service, and we want to jump right into business and get that product or service to our customers who must be desperate for what we have to offer. Let’s make big money now. Back up. Timeout. You’re going to become that guy who gets thrown off the bull and trampled. We challenge you to stop. Stop right now. No matter where you are in your business’s life cycle, take the time to write out a business plan.

"I’ve had substantial success in my own businesses and those that I've invested in. I can tell you there is an action plan at the center of everything we do." Simon Fallows - Grapple Corporation

"In one of my companies, Heritage Investors, my business partner and I sat down with our employees a couple of years ago, and we built a business plan. We clearly defined who we wanted to work with, what we wanted to offer, and how we would provide it. Our team projected a gain of 25% per year, but because all of us were working on the same goals and moving in the same direction, we actually averaged 50% growth per year. That’s double the revenue we anticipated!" Justin Goodbread - Heritage Investors

The Business Foundation Drives the Business’s Success

You don’t reach success by creating a one-and-done business plan and walking away from it. The plan goes into practice, and then the practice becomes routine. Layout one-year revenue, product, service, improvement, and sales goals. Then each team member contributes thoughts and ideas before you put them on paper. You need the whole team to buy in and everyone pulling in the same direction.

After building the business plan, break up the goals into 90-day sprints where you can focus on one key item. One, that's right, stick to one item every 90 days. Within each sprint, meet monthly to evaluate your progress in reaching the goal. Have primary team members met weekly to assess what needs to get done in order to reach the monthly goal, with no exceptions or excuses. Hold the entire company accountable for achieving the goals created as a team, and hold each other accountable for reaching those goals.

Your business plan will propel you forward. It should provide motivation, inspiration, and an incentive. When you achieve each short-term goal, celebrate, knowing that you will achieve your “ultimate goal” if the process continues every 90 days. For you, the business plan should be THE tool for your business’s monthly, quarterly, and yearly success.

Business Success Makes a Business Sellable

We are helping clients all over Canada and the United States grow their businesses to sell them by creating a recurring foundation in the form of a business plan. We don’t care if you have 1 employee, 10 employees, or 300 employees. Every business has to get the employees, their team members, to buy into the business’s goal. If the team gets it, they’re happier, they’re more fulfilled, and they’re more motivated. They hold themselves and each other accountable. They propel you to greatness and your business to success.

Stop giving excuses. Quit telling us you don’t have time. Stop. Make time. Wherever you are in your business’s life cycle or whatever time of year you hear this, make a business plan. You think you don’t have time, but you don’t have the time to waste by spinning your wheels without direction. Make the time.

Follow along….. as we explore building your competitive advantage next week.

To get the most out of this series we suggest you read "The Ultimate Sale" available in Canada on Amazon.ca

About Justin A. Goodbread, CFP?, CEPA?, CVGA?, owner of US-based Heritage Investors, LLC and FinanciallySimple.com, is a nationally recognized financial planner, wealth manager, financial educator, author, speaker, and entrepreneur. Armed with 20+ years of experience starting, buying, selling, and owning businesses, Justin has dedicated his time to helping fellow business owners increase and manage the value of their businesses.

About Simon Fallows CEPA?, owner of Freedom for Founders, a Canadian exit strategist, entrepreneur, and investor who has experience starting, selling, and buying businesses.