- My LS
Four reasons why you need a business plan
It may be obvious why you need a business plan - Tom Blandford of Armstrong Watson considers some of the less obvious reasons.
As a leader of a team (of any size, from heads of departments to managing partners), there are many demands on your time. It can become all too easy to fall into the trap of prioritising the urgent stuff over the important stuff. We might all agree that planning for the future of your business (or department) is important, but somehow we never seem to think it’s urgent.
So why have a business plan at all?
1) It focuses your mind
Ironically, the very excuse we most often give for not having a plan – the time to write one – should be your primary driver for having one. If you find yourself always working late, if everything is urgent, or if you are always jumping from one task to another, then it suggests that you need a plan. Being able to refer back to that plan can help to focus on the most important things to be done.
2) It helps your team develop
How can your team know what to do next, if you do not? Faced with competing demands on their time, it can be helpful for them to know which pieces of work you / the business consider more important.
For those looking to develop and progress, the ability to understand the strategy and their part in it can help your people align their individual objectives with those of the team.
3) It’s empowering
In planning all the things that you intend to do, it’s easy to forget that you are also saying what you will not do (or at least identifying the things that are less important). Managing partners that we help to devise these strategies often find it very liberating when they realise that they do not have to do something if it is no longer on the ‘critical path’. Your team can also feel empowered in knowing that certain things are less important, or in some cases, do not need to happen at all.
4) It’s a live document
Clients and teams change. Priorities have to change to reflect that and so do the plans that underpin them. Yet so many people will write a five-year plan and then just put it on a shelf somewhere. The best plans are capable of being broken down into smaller (and more immediate) actions and then referred to on a weekly (or at least quarterly) basis, to be reported on and updated as necessary.
While every plan is different, it’s important to focus on the process – hold meetings to understand where you are now, and where you would like to be. Think about how frequently you will refer back to the plan, and how success will be measured in these review meetings.
Where should you start?
Where do you want to be in five years’ time? It sounds like a long way away, so it’s good to break down your longer-term plan into months and set goals that matter here and now. Then, measure those goals; identifying the right KPIs can help transform the results of your business and your working life. Ask yourself:
- Where are we now in the business lifecycle?
- How do I align the business objectives and my personal objectives?
- What barriers do I face (internal and external)?
- What does success look like to me?
Some headings I recommend for your business plan:
- Executive summary
- Aims and objectives
- The organisation
- Risk analysis
- Marketing plan
- Structure, operational and staffing
- Financial information
- Specific tasks / actions and timescales
There is, by the way, a more immediate answer to the question of why you need a business plan – you have to have one. The SRA, the bank, various funding providers and senior lateral hires are likely to demand to see a business plan in a variety of circumstances.
I hope this article has proven that the primary use of a business plan is as a document for you and your team to drive behaviours, prioritise tasks and, ultimately, free up time. That others will expect you to have one is a secondary consideration.
Tom Blandford is a legal sector director at top 30 UK accounting firm, Armstrong Watson LLP. Rosy works exclusively in the legal sector advising law firms throughout the UK on strategic, structural and other business improvement issues as well as providing efficient accounting, tax and SRA accounts rules services. Further information can be found at www.armstrongwatson.co.uk/legalsector
This article is a general guide to the issues that we see in practice. It is not a substitute for professional advice which takes account of your personal circumstances. No responsibility can be accepted for any loss occasioned by any person acting or refraining from action on the basis of this article.
The Law Society has partnered with Armstrong Watson LLP, who provide accountancy services to law firms throughout the whole of the north of England.