Why SMEs, SMBs need digitised business plan from day one
When talking about the importance of a business plan and having a structure that you follow when going around business matters, we often think that this mainly works for corporate. Small and medium enterprises also stand to gain a lot from having a business structure.
In East Africa, for instance, many SMEs wait for their business to grow to become advanced before they execute some structure to their businesses.
I understand that most SMEs and SMBs focus on how much it will cost them to implement a structure into their businesses, or to transform digitally. It is important to know how much they can benefit from digitising and getting a business structure. Let us have a look at some of what these SMEs and SMEs stand to gain.
As a business, you will find yourself asking a bank, angel investor, or venture capitalist for funding. What you don’t think about is that they are going to want to know that you have a good handle on your small business’s trajectory.
You don’t need to write a 300-page document, but you will need something to hand to your banker or investor that shows that there’s a market for the problem your business solves. Having a business structure and a comprehensive business plan should make it simple for potential partners and supporters of all kinds to understand your business model and financials.
It’s even better if you’re able to present data visually through charts and graphs. Having a business structure will help you have the data that you can quickly use to develop the charts and graphs to present to your potential supporters.
As your business grows, some of the best problems you’ll have are figuring our when to hire new employees, when to expand to a new location, or whether you can afford a major purchase. However, with a defined business plan and a business structure you can easily make the decision to make the right step at any given time.
These decisions are normally major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions.
When you’re just starting out, there’s so much you don’t know. You know less about your customers, your competition, and even about basic business operations.
As a business owner , you sign up for some of that uncertainty when you start your business, but there’s a lot you can do to reduce your risk. Creating and reviewing your business plan regularly is a great way to uncover your weak spots – the flaws, gaps, and assumptions you’ve made – and develop contingency plans.
From there, you can seamlessly adjust your forecasts and make adjustments in your business (marketing, sales strategies, production, inventory) as you learn what works and what doesn’t.
Having structure in your business and a comprehensive business plan can help you map how your sales and revenue goals fit with your expense budget. Drawing a clear connection between what you’re investing in and the results you hope to achieve will help you make sure that you’re setting yourself up for success.
A business plan makes it easier to get everyone on your team on the same page. You’ll be able to explain, in simple terms, how you think you’ll get from here to there. Rallying your team to align toward the same prioritise at an early stage will increase your efficiency as a whole.
It is important to have everyone on your team seeing the big picture and understand your larger goals. You need their buy-in from the beginning, and as you progress, you want to make it easy to track and communicate on your progress.
If everyone on your team knows how their piece of the work impacts the larger company, the more invested they’ll be in meeting your goals because they’ll know their part of the work really matters.
Writing a business plan is not about producing a document that accurately predicts the future of your company. The process of writing your plan is what is important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and be successful.
Business planning is about regularly setting goals, tracking your progress toward those goals and making changes to your business as you learn more about your customers. Companies that review their results regularly really do grow faster and actually perform better. These businesses are less likely to become one of those woeful statistics on business that fail, or experience cash flow crises that threaten to close them down.
In East Africa, a lot of SMEs and SMBs are set up daily. However, a good number of these businesses do not, make it past the first year. They need to start planning about the business and having a good structure from day one.
— The writer is the vice-president for sales at Greytrix
