A business plan is your secret weapon. It’s the backbone of all great hospitality firms. There are many opportunities in today’s business environment. So now’s a great time to create a brand new plan to drive your business forward.
As the saying goes, if you don’t have a plan, you’re planning to fail. Which means without a plan you may be able to make some progress. But you won’t know what your future looks like and how to achieve it.
A business plan defines success for your enterprise and sets out milestones to achieve it. It’s a way of assessing your firm’s strengths and weaknesses, make the most of your pluses and address any limitations. It’s also a tool for reviewing the competitive landscape and working out your unique selling point. It will help you work out what to do and how to gain control, even when the commercial landscape and the economic outlook is shifting.
During your business planning journey you will:
Set goals and milestones
Look for opportunities
Model future revenue
Review the plan and measure its success
Australia’s gourmet fairy floss pioneers Fluffy Crunch have reconsidered their business plan recently. Founder Michael Karamallis explains the company recently shifted to a mostly online model, prompting a 700 per cent increase in internet sales in just three months.
“We have a 90-day business planning cycle and set a number of different targets to focus on during the quarter. We elevated our plans to develop the online side of our offer at the start of the year,” he says.
This has meant a huge amount of effort given until now, most people haven’t thought about buying fairy floss online. So the team has used social media to directly reach customers, giving people who buy online a chance to go in a draw to win 60 tubs of its delicious product, which includes incredible flavours like bubble gum, galaxy pop rocks and unicorn dreams.
Now, Karamallis and his co-founder wife Paola have plans to target the gifting market with their category-redefining product, providing a genuine point of difference to the more established players in the sector.
1 Page business plan worksheet
Use our 1 page worksheet to help develop your business plan
How long should it be?
The Goldilocks principle applies to business plans. Too short and it won’t contain enough detail to define success. Too long and it will be unachievable. You need a document that’s just right. This will make it easy to regularly review it. Be aware a business plan you prepare for a bank is going to be a lot longer and more detailed than the one you use within the business.
“Many businesses believe a plan has to be extensive and broad. But a simple yet achievable, well-thought-out business plan is far more powerful,” says Brian Sher, co-founder of Sydney-based business coaching firm The Fortune Institute.
Most plans should be between one and five pages with no more than five KPIs, which should be SMART – specific, measurable, achievable, realistic and time-bound.
"Many businesses believe a plan has to be extensive and broad. But a simple yet achievable, well-thought-out business plan is far more powerful"
Brian Sher The Fortune Institute
Identifying opportunities to pivot
The new commercial environment means there’s more demand for some products and services and less demand for others, which is an opportunity to ‘pivot’ your offering. This involves re-thinking what you sell to help get new customers and lift your revenue and profits.
Equipment supplier to the carpet cleaning industry Carpet Magician is a great example. This is a competitive area and the products firms offer across the sector are almost identical. In this example, the firm previously relied on advertising to generate sales and only won business after undercutting the rest of the market. But this only led to lower profits.
So Carpet Magician needed a new approach. The business’s carpet cleaner customers actually had a more pressing need than simply paying the lowest price for equipment. Finding new customers and raising profits was far more important.
The Fortune Institute helped the firm set up an online Carpet Cleaning University to educate its clients about making their own business more profitable, with free access to the university with any purchase. This new approach produced an 800 per cent rise in sales within six months.
Working out if you have a market
Coming up with great new business ideas should be a priority. But you need to analyse data to make sure your ideas are going to work. This involves finding prospective customers and asking them unbiased, open-ended questions about:
- Their need for the product or service
- The features they value
- What they think of competitor products
- The price they are willing to pay
You can put together a simple customer survey using Google forms or Survey Monkey and run a competition with small prizes to get the information you need.
IBISWorld is a great place to find information about market size and major players in an industry. You can get basic information for free, but need to pay for full reports. The Australian Bureau of Statistics also has lots of information on its website and a free telephone service you can call on 1300 135 070. Industry associations are another reliable source about your sector.
Need something more in-depth? Try our free business planning course
If you’re new to business planning, try MYOB’s free business planning course.
We’ve also got a great in-depth template you can use to create a business plan.
The federal government has also developed this guide to business planning.