So, just how good is your business plan?

Next week is National Business Planning Week, so it’s an opportune time to assess the quality of your business plan. Or to set about writing one – because no business will succeed without a plan.

“Very few business owners step back and plan; they spend all their time in the noise,” says entrepreneur James Caan, CEO of Hamilton Bradshaw and a former member of the Dragons’ Den. “Sometimes you can’t see the wood from the trees. It is so important to take the time to reflect, because you need to have the opportunity to know where you are going. I don’t think small businesses do plan long term. Planning can appear to be a luxury.”

“The ability to look forward and plan characterises a successful growth business,” says Doug Richard, founder of The School for Startups and another former member of the Dragons’ Den. “Alongside that is the ability to test those plans. Most great businessmen go out in the world to learn. They test their hypothesis against customers, vendors, community, and equally against a trusted source.”

“As much as you need passion to start a business, you can’t do it on passion alone,” says Wilfred Emmanuel-Jones, founder and CEO of food business The Black Farmer. “You must research and plan. You need to challenge yourself. All too often people aren’t prepared to do that. If you don’t, it’s a recipe for failure.”

Writing a business plan is a vital discipline. But remember, as entrepreneur Bev Hurley remarks in her video on this website, it rarely survives contact with reality.

Useful sources on how to write a business plan

You will find lots of material and ideas on the National Business Planning Week website. At Gov.uk you will find links to templates and examples of business plans.

The main clearing banks provide detailed checklists and questionnaires to help you construct a business plan. This is the Barclays version. The Lloyds sample business plan provides illustrative text. HSBC asks a structured set of questions. Santander provides specific guidance for business plans in 200 industry sectors.

Your accountant should be a point of call. The Institute of Chartered Accountants in England and Wales (ICAEW) business plan guide also takes the form of a structured set of questions. There’s a substantial set of checklists to consider from Chartered Institute of Management Accountants CIMA.

Here is a guide and a short video from the Institute of Directors IoD.

So there is plenty of online advice and guidance. Don’t just read one guide. Read several and pull them all together. It’s down to you to inform the plan with your own passion, creativity and vision but you can channel it into a clear and comprehensive structure.

Use your plan to drive your business

And then don’t just stick the document in a drawer. Revisit it. Review it. Update it.

“I am incredibly disciplined,” says James Caan. “I spend every Saturday between 10-12 looking at where my business is going, what it’s doing, whether we are making the right decisions, what we are trying to achieve. I have been doing this religiously for the past 30 years. I find those two hours, just on my own thinking about the challenges that the business faces, absolutely invaluable.”

Mike Ottolangui, director of Norwich-based engineering company Milltech, describes planning as “really important.”

“We had an aggressive business plan and got there in four years’” he says. He and fellow director Darren Osborne update their three-year plan every year.

In addition, the pair document everything that the company has achieved over the past 12 months. “Once you put those things down on paper, it reminds you of all the positive things you are doing in the business and makes you feel much more confident that you can achieve your next set of goals.”