The importance of an internal business plan for an existing business

By: Yaron Levy

A business plan is a basis for the conduct of businesses and companies from all sectors of the economy, and enables correct, professional, profitable and consistent conduct over time. Since it includes a large number of aspects, some of which are complex, and since some business owners do not have sufficient understanding and knowledge to build a realistic, professional, objective and serious business plan that will lead to the desired goals, it is of great importance to build it through a skilled business consultant.

 

A few words about a business plan for an existing business

Before discussing the importance of a business plan for an existing business, it is worth clarifying what it is. For those who don’t know, A business plan provides a detailed forecast of expenses and income in business every month for the next year or two. The program deals with all aspects and activities in the business such as development and production costs of products, internal and external employees, expenses on salaries, storage, distribution, costs related to the provision of business services, overheads on all their components and more. In addition, the program refers to the pricing of the products, competitors of the business, the degree of demand or saturation in the market, the management structure and the organizational tree, everything related to the field of marketing, advertising and sales, and so on.

 

For those who wonder why a business plan is even necessary for an existing business, or why it is important, we will explain that in a business world operating as it is, this question would not arise at all. At the same time, the fact is that in the local economy there are many businesses that are not run in the light of an orderly business plan, and this is certainly evident in the activity. When you look at such businesses, you see conduct that is not the result of a clear strategy and therefore is not serious, planned and organized, but rather appears to be a reaction to the changes that are happening in the industry and the market. Often in such businesses there is a feeling of overload and the owners are very busy putting out fires, without having the leisure to grieve, to think, to see the big picture that a business plan was supposed to give, and to act accordingly. In such situations, it is not surprising that the same problems and mistakes repeat again and again, to the point that the red lights almost never turn on, and there is no possibility of providing solutions anyway – which the business plan was supposed to provide.

 

So when discussing the importance of a business plan, it should be said explicitly: every business that wants to operate over a period of time with good profitability needs a business plan. It is a basis and foundation for any business that wishes to operate with a compass and a map that guides the way, for any business owner who wants to know where he stands, where he is headed, what challenges and obstacles stand in the way, what problems exist and how to fix them, as well as for any business that strives to keep the right line and uniform over a period of time. Unfortunately, some business owners believe that a business plan prepared by a business consultant is only required for businesses in distress. Of course, if there is a period of shuffling, slowdown and even a crisis, it is essential to get business advice, of which writing a business plan is an essential part, but even if there is currently no weak period or shuffling, and even if no significant change in the business’s activity is expected, it is very important to work with a business plan. In practice, this is a basic work plan with which you know what the expense budget and sales goals are every month, and it is the one that defines the goals and the ways to progress for an extended period, also in light of changes that will occur in the industry.

 

How to build a business plan for an existing business

As mentioned, the business plan deals with the whole of the activities of the business and its aspects. Therefore, it must be based on the business consultant’s in-depth knowledge of what is going on in the business, starting with the day-to-day management, through the financial aspect to marketing and advertising matters. To this end, the process begins with a thorough review of the business, where the business consultant examines a long series of aspects, such as the financial reports of the accountant (if necessary, also issues detailed and clear financial reports to the business), the cash flow situation, loans and other obligations, agreements with suppliers, circle The customers, competitors and the activity environment, the personnel situation and jobs, sales and marketing processes, and so on.

 

Already during this review, the business consultant begins to bring insights and recommendations for improvement, for strengthening weak points, for existing opportunities, for utilizing the assets of the business, and can present an objective and professional picture that often presents what is being done in the business in a new light. To a large extent, the business plan takes this picture, the possible solutions to the discovered problems, the opportunities, etc., and turns them into one piece with clear and defined goals. That is, with practical and realistic steps based on accurate data, as opposed to wishful thinking and fantasy, which lead the business confidently and gradually towards increasing profitability and even turnover.

 

Naturally, the contents of the business plan will change according to the state of the business. For example, in a certain business, emphasis may be placed on reducing expenses by reducing the scope or number of jobs, outsourcing some services, self-importing specific components or products, changing the composition of products, reducing supplier costs, reducing current expenses, and the like. On the other hand, in another business, the business plan may emphasize the sales and business aspect, and aim at more beneficial avenues such as business collaborations, digital media, incentives for salespeople, and the like. On the other hand, in another business it can emphasize changes in the financial aspect, such as examining the possibility of injecting capital through an investor or partner, turnover or closing loans, and of course a business plan designed for one business can emphasize all of these issues and more.

 

It should be emphasized that a business plan is not a list that is made "on the paper" and go into the drawer. On the contrary, it is a practical plan that is intended for implementation, and this implementation means that certain changes are required in the business. since it is not easy to get out of "the comfort zone" and to make a change in conduct and even in perception, there is an important place for the support and confidence that trust in the business consultant gives. The trust is built during the process during the conversations with the business consultant, when he checks the activity in the business, when he brings recommendations, insights and a comprehensive and professional picture.

 

In addition, the business consultant does not end his role when the business plan is written. He continues to accompany the business owner for as long as necessary while monitoring the expectations of the plan against the actual results, and if there are gaps, he examines the reasons for them, and if necessary – suggests changes and accompanies them. The business consultant is also there for the business owner and helps him deal with questions, challenges and personal obstacles in the way of carrying out the necessary actions or changes, and provides him with many years of experience in business consulting and establishing and managing businesses in the field.

 

What clauses exist in a business plan for an existing business

As mentioned, the content of the business plan varies according to the nature of the activity in the business, according to the goals that have been set and the problems that require correction, as well as according to the purposes of writing the plan (for internal use, for obtaining a loan, for the eyes of an investor, etc.). At the same time, almost all business plans are made up of several classic sections, and start with an executive summary (which is usually written at the end), which summarizes what was said in the other sections. After that comes a section of products and services in the business about their advantages and the costs of their production and distribution, and another section dealing with the structure of the management and the business, its location, the advantages of the employees and the management compared to competitors, salary costs, positions and the like.

 

Another section refers to the competitors and the market, strategies that are successful, strengths and validity of competitors. The next section deals with the field of marketing and sales – how to attract and retain customers and how the marketing and sales processes will be carried out, income from meeting sales goals and resources that will be invested in branding and marketing. The last section deals with the sources of financing – revenues, equity, investors, loans, where the funds will be invested and for what purpose, expected profits in the next year or two, and so on.

 

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