Build a business - why you need a business plan

  In the next installment of our Build a Business series, Antony Whitaker looks at the importance of having a business plan. Think of your business plan as a map. You wouldn’t get in your car and drive off into the sunset if you didn’t know where you were going; likewise, you shouldn’t even consider opening or evolving a business without a plan showing where you are going and how you will get there. Few salon owners have a business plan and fewer still have ever gone through the process of developing one. So if they haven’t, why should you? The answer lies in the harsh reality that many businesses fail. Nobody opens a salon aiming to fail, but being in business is more challenging now than ever, and whatever advantages you can give yourself at the outset may make the difference between survival or failure. Yet by nature, many hairdressers are the kind of people who want to get everything up and running as quickly as possible and ‘act’ rather than spend time thinking and planning. Some might even consciously avoid developing a business plans because it’s difficult to confront and challenge assumptions and change them where necessary. But spending time planning forces you to look at your ideas critically, and that may save many costly mistakes later. The real value in creating a business plan lies not so much in having the finished product in your hand, but in going through all the thought processes and questions you need ask yourself in its development. Successful business planning relies on this question and answer process, using a proven sequence of subject headings that have an impact on all businesses. Time spent thinking about and planning the business you want allows you to plan it right and so give yourself the best chance of success. What your business plan covers A business plan should cover everything about your business in a written snapshot summary of no more than 15-20 pages. Exactly how much detail you include depends on who it is aimed at and its purpose. Developing your business plan makes your goals real. That’s important to you, your team and anyone with a vested interest. The plan will help communicate your vision and approach as well as keeping you focused on the salon’s goals and objectives. Typically a business plan will be broken down into key areas: • Executive summary • General company description • Product/service offering • Marketing plan • Operational plan • Management plan • Financial plan • Appendices: additional detailed reference material, examples, statistics, charts, spreadsheets, etc. Make sure they are numbered and referenced in the main body of the plan. Although the headings, sub-headings and questions may change depending on the type of business, these key headings address the core components common to every business. Every day, businesses will fail because of financial issues, so although you may find it challenging, getting the financial component of the plan right is essential. Apart from the financial aspect a business plan: • Clarifies the business vision • Defines specific objectives and the strategy to get there • Commits you to an approach • Aligns everyone on the team behind common goals • Outlines what you will and won’t do • Establishes priorities So don’t try to bypass it or jump ahead before you are ready. Planning could be the difference between success and failure. Antony Whitaker is a leading educator and motivator, with a worldwide reputation based on more than 30 years’ experience in the hairdressing industry. An award-winning stylist-turned-educator, business coach and best-selling author, he has taken his message on management, money, marketing, team-building and retailing to more than 250,000 hairdressers in 40-plus countries. www.growmysalonbusiness.com For more informative and inspirational business news and features subscribe to HJ