In the last column, we discussed how the desire for growth should come from the heart. This time, we examine how to take your practice in the direction you desire. In our most recent survey of small- and medium-size enterprise (SME) growth, two-thirds of the fastest growing firms operated with a business plan. Less than half of low-growth or declining businesses in the survey had a written business plan.

Do business plans go against the buccaneering spirit of entrepreneurial businesses?
Yes and no. Excessive bureaucracy or complex processes will obstruct a business that needs to be nimble and flexible to compete and survive. A lack of planning, however, is a recipe for chaos. In its early stages, the founder holds the business together in his/her hands. Usually, the business started in response to a perceived opportunity. Being fleet of foot is vital. As the business grows, it can no longer be completely driven by identifying and seizing opportunities. Instead, the business will benefit from clear guidelines that enable the founder and team he/she created to focus on areas for the business to best thrive and deliver value.

When is it critical to develop a business plan?
Some founders operate with a detailed plan from day 1. The only certainty is that the business will not go according to plan! But, a start-up plan provides a method for measuring achievements and checking if the business is going in the desired direction. Many successful entrepreneurs claim an instinctive start. Generally, however, they admit to planning as soon as they feel they are backing a winning proposition.

Is there a formulaic business plan I should use?
There are dozens! Find a style and format that suits you and your business. In industries with clear and predictable cycles (eg, buying patterns of the fashion market), it makes sense to mirror these in the planning. Some businesses I know avoid long plans with a great deal of text and use visuals wherever possible.

What should the plan cover?
A plan that is developed for the short to medium term (eg, 1 to 3 years) should cover as a minimum (1) the practice's market position, (2) its position relative to direct competitors, (3) the strengths and weaknesses of the services you offer, (4) the historic financial performance of the practice, (5) its performance relative to competitors (if this can be established), (6) the financial structure of the business (chiefly equity funding vs debt), (7) the management structure and (8) a review of operations.

Many businesses find it useful to operate with a three-part plan structure: (1) Where are we now? (2) Where are we going? (3) How do we get there? Each part works through the elements identified above. In your desire to grow, you may consider opening a satellite office or establishing a refractive center or ambulatory surgical center. To get there, quantify your starting point by activity, income, current structure and organization. You are already aware of where you want to go, so develop a more detailed definition including location, size, equipment, staff required, capital costs and running costs. Estimate increased business and revenue. Once this is accomplished, documented and makes sense, then proceed with the strategy on how to get there. This exercise provides you with a roadmap, clearly articulating what you want to accomplish from the point of departure to the route and destination. Deviation from the plan is common, but the roadmap provides a clearer sense of direction.

What should the timescale be?
These days, few businesses can plan with certainty for more than a couple of years. The nearer the timescale is, the more detailed the planning will be. Conversely, the longer the timescale is, the greater the emphasis on setting direction will be.

What should I avoid?
A huge tome that languishes unread in the bottom drawer!

For further reading on the business planning process, Mr. Molian suggests Enterprise Development: The Challenges of Starting, Growing and Selling Businesses (Barrow, Brown, Burke and Molian), Thomson 2005, ISBN 1-86152-989-9.

For more information about the Cranfield Business Growth & Development Programme, visit: www.som.cranfield.ac.uk/som/groups/enterprise/credo/index.asp.