Planning for self-employment success

It may be a cliché to say that those who fail to plan plan to fail, but this doesn’t mean it isn’t true, especially if you are self-employed. As we’ve seen from this summer’s Northern Rock fiasco and the most recent pre-budget announcements, business conditions can turn on a sixpence so you need to understand your business inside and out. Not just where you are today, but where you want to be tomorrow, next week and next year.

As Mark Scott (Natwest franchise development director) mentioned in his recent podcast interview for The Franchise Show, anybody who approaches a bank for franchise start-up capital will be expected to provide a detailed business plan to demonstrate the opportunity’s financial viability. All well and good and nothing less than any reasonable person would expect. In fact, most franchisors, Auditel included, will give you a template business plan and will help you prepare figures to take along to your bank. Your business plan should include the following elements:

(For more information on writing a business plan, visit the government’s Business Link website at www.businesslink.gov.uk)

However, this is just the very first step in planning for the long-term success of your business. Having put your initial figures together to impress the bank and reassure yourself, the next challenge is to turn guesstimates into reality, by which I mean cold, hard cash. In your start-up phase you’ll be busy getting to grips with all the new (and hopefully, exciting) challenges of running your own business so it would be very easy to put the rather dry subject of planning at the bottom of your list of things to do. But this would be a mistake. If starting a new business is an expedition, then your business plan is your survival kit. You wouldn’t go trekking in unknown territory without a clear idea of your destination and a map or GPS to help you get there, so why would you start a new business without a clear idea of what you want to achieve and how you intend to achieve it. More importantly, throughout your trek, you’d use your map or GPS to check your current position against where you expect or intend to be. A good, up-to-date map will clearly show you where there might be obstacles or challenges to overcome, and if you do come across anything unexpected, your map will help you find an alternative route.

This is a simplistic analogy but does illustrate the point quite well: if you don’t know where your business is, compared to where it needs to be to achieve the goals you’ve set, how will you know whether you are on course for success or failure? This is why you need to have a plan that you review and update regularly. To help our franchisees do this, we’ve developed an online Business Management Tool, which complements our initial planning tools and works in conjunction with our ongoing personal and professional development programme. By taking the base-line information from your business plan and inputting it into your personal BMT along with real-time data from each client project, you will be able to compare your projections with your actual performance at the click of a button. Having this information will flag up issues that need to be addressed before they become problems and will help you make intelligent, informed decisions as well as effectively focus on both your personal and financial goals. After all, it’s much easier to prevent a problem than cure one and running your own business should be less stressful than employment, not more!