Many home service businesses started with a dream. The owners hoped to earn money, provide better service and higher standard of client care, grow their companies and have more freedom. So, they did what many others before them had done — they jumped in their trucks and got to work.
While that’s admirable, a business needs more than a dream and elbow grease to grow and thrive. As business owners move down this path, they often realize they’re not earning what they thought they would and don’t have the freedom they wanted. They’re shackled to their business with no good way forward.
That is why a business plan is so important for any home service business. It’s a roadmap to hope, a detailed plan of specific actions that will help the company move towards the owner’s vision. It provides guidance when changes need to happen or decisions need to get made. And, especially in uncertain times like these, a business plan is vital to keeping a business moving forward in purpose and profitability.
Here is an overview of solid business planning and what it can do for your business.
The benefits of a business plan extend beyond hopes and dreams. The real-world benefits and return on investment are too significant to ignore.
Primarily, a business plan gives focus to the owner’s efforts. With a robust plan, they don’t have to figure things out on the fly. They know their destination and have a map to get them there.
Once the plan is created, the owners and managers feel empowered because they can see the vision, the destination, and the path to get there, with absolute clarity. Financial decisions are also easier. Most good business plans include projections for revenue, gross margin, overhead, profit, and always-critical element of cash flow. You’ll also start attracting the best talent because your business is growing and opening up career opportunities, and you’ll be in a better position to sell the business when you want to retire.
In addition, a business plan gives the owner peace of mind. It keeps them from operating from a place of fear. It serves as a kind of north star that helps keep you on course when events cause confusion or uncertainty.
The dangers of operating without a business plan are very real. Without goals to work towards and specific actions to take, your company could grow stagnant. When this happens, the game of business loses all fun and excitement. It could become a burden instead of a joy. You could find yourself at the mercy of circumstances instead of controlling outcomes.
The worst danger of all is accepting a stressed-out business life as your new normal. Just barely making ends meet is not normal, and you don’t have to live that way. A business plan will lift you into a better, more secure place where you can find excitement and growth again.
Vital in a Crisis
Businesses in North America and around the world are responding to the COVID-19 crisis right now. A business plan is particularly valuable during a time of crisis because it clears the haze of fear and provides a path forward.
Most businesses fail due to cash flow problems, and that becomes even more of an issue in a crisis. Cash carries us through. And since budget and cash flow are key elements of a good business plan, the owner can run forecasts for any scenario, making decisions before they happen, like adjustments to staffing and overhead.
In addition, since a good business plan includes robust crisis planning, you’ll be prepared for emergencies and contingencies of all kinds. In situations like these, fear and uncertainty can drive people to poor decisions. A business plan helps lift you out of fear by providing confidence in your direction, just like that guiding north star.
More Than a Budget
The problem with many business plans is that they’re not comprehensive enough. Many businessowners create a budget and think they’ve created a business plan, but that isn’t true. Solid financial results are the products of action, so a business plan must define the specific actions that will bring about your desired financial outcome.
So, it’s generally misunderstood that a business plan is all about numbers. If you start a business plan with numbers alone, you’re likely to miss key opportunities for growth and profitability. Instead, start with opportunities and create action items.
Key elements to put in your plan include:
- Corporate culture, including mission, vision and values statements.
- Key goals for departments and associated implementation plans.
- Organizational planning.
- Budget, capital expenditures and cash flow.
- Marketing and lead generation.
- Long-range planning.
- Continuity and disaster planning.
Another mistake that business owners make is putting off creating a business plan, saying that it’s not the right time or similar reasons. It’s never too late to create a business plan. The time is now. While it can be tempting to put it off, you should make it a priority and update it every fiscal or calendar year as circumstances change.
Creating a business plan is an involved process, but you don’t have to go it alone. Owners can find many resources to help them craft a business plan although be careful in which ones you choose. There are plenty of do-it-yourself programs available, and many of them can help you create a serviceable plan, but some of them will leave you with a budget and nothing else.
For best results, you should choose a system that has a third party facilitating your planning process. Having a professional coach will help clarify your thinking and guide you through the complex process. They will challenge you to look critically at the realities of your business and set realistic goals and strategies.
So, don’t delay! You and your business deserve better! You deserve to feel more confident, focused, energized and empowered, and you deserve to achieve your biggest goals.
Written by Kim Archer. Have you read?
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