In 2015, a record number of new businesses were set up in the UK – over 600,000 people took the plunge and became business owners. The sad facts are though that, based on past experience, it’s likely that 20% of those businesses will fail during their first year, only 50% will make it to their 5th birthday, and by 2025, 70% of those new businesses will have shut up shop.
So what is it that determines the success or failure of a business? Is it the impact of external factors such as the economy, or is there some other reason? Of the many thousands of unsuccessful businesses, what percentage planned for the economic changes we’ve experienced? How many of those businesses had a business plan? How many had a budget and cash flow projections? And would having those plans and projections in place have helped them to survive?
Well, you may be interested to learn that having a strategic plan for your business, implementing that plan and measuring the results makes the single biggest difference in highly successful businesses.
Despite that fact, recent studies by a leading UK bank suggested that 1 in 4 SMEs in the UK do not have any sort of plan to provide them with a clear strategy and path to support their growth, and in new businesses, the percentage is even lower. In fact, less than half of the UK’s small businesses have a formal business plan in place that is written down or recorded, while the remaining 25% have only an informal, verbal plan. Furthermore, less than half of UK small businesses have a succession plan in place.
Without a clearly defined vision and plan for the future of your business, how can you plan your route, ensure you’ve got the right team in place to deliver your goals, check your progress along the way and know when you’ve arrived at your destination?
Maybe now you can see why the failure rate of businesses is so high. So why do people resist planning for their future success? There are many excuses that I hear – you don’t have the time, the future is too uncertain to make a valid plan, you don’t know what you want your business to be (or haven’t even thought about it), or maybe you just don’t see the value of having a plan. But that’s all they are – excuses.
So how do you get motivated to make a plan for your business? Well, the first step is to make a plan for yourself – and when you see what a difference that will make to your time management and focus, hopefully you’ll see the benefit of investing the time to develop a comprehensive business plan to take your business forward.
At ActionCOACH, we teach our clients to first start with a realistic daily calendar that has ‘default’ areas to work on various important but not urgent tasks. What are the three core tasks that you could complete today that would drive your business forward? What is the highest and best use of your personal time? Are you still carrying out tasks that others could do? What is it that you do really well and that would make a difference in your business right now? So why aren’t you doing it?
Studies have shown that by having a plan it is easier to overcome procrastination. One minute of planning will save you up to 10 minutes in execution of the plan. How much time would that free up? And imagine what it would feel like if each day when you arrive at work, you would know exactly what you were going to be doing that day – you would feel in control of your destiny rather than at the mercy of outside factors.
Taking time to work ON your business not IN your business will set you apart from the vast majority of other business owners and is the first step on your road to success, both personal and professional. In these times of economic uncertainty, it’s more important than ever to start thinking more strategically – there are always opportunities to be had, regardless of what the economy is doing. So if you don’t have a business plan, why not talk to us and see how we can help you develop your action plan for business success?