How to plan your business for success
Starting your own business can be an exhilarating leap into the unknown. Whether you have a long career in insurance or are new to the industry, it’s only natural to want to hit the ground running and focus on the product that you sell. But that’s not always the best way to achieve success.
"We talk to our partners about working on the business and in the business," says John Schroder, National Partnership Manager at QBE. "They’re two different things."
John works with Authorised Representatives as a trusted partner to help them through the ups and downs of owning their own small business. He believes that understanding the big picture is vital if you want to reach your goals.
"Working in the business is getting caught up in the day to day. Working on the business is the planning aspect. When you’ve got your business plan, you know what you want to achieve and can take a step back and work out how you’re going to achieve it. It’s asking, what do I want to be known for?"
What is a business plan and why is it important?
A business plan is a formal document that gives your business direction, it defines your objectives, maps out strategies and helps manage possible setbacks. It should motivate you along your chosen path and keep you accountable at the same time.
Cheryl Hambly, Director of Bounce Readiness, started her business in July 2020. She believes that a business plan was a crucial part of her preparation. "I spent a few months building out a business plan before I started," she says. "I’m so grateful I had the plan in place and completed the thinking process beforehand."
For Authorised Representatives in particular, John says that a business plan gives them something to measure down the track.
"If you don’t have a plan of what you want to do, what are you really measuring yourself against? How do you know if you’ve had a good day or a great day?"
The question is, what do you need to include in your business plan to create a great day?
Define your vision and mission
When Cheryl started her business she "had a clear direction of where she wanted to take it." For her, the first step was setting up her vision and mission. "I had a purpose," she says. "Documenting that purpose has allowed planning and provided a reference point while starting and growing the business."
Best-selling author and ethnographer Simon Sinek may be best known for popularising the concept of a purpose-driven WHY in his first TED Talk in 2009. He believes that "people don't buy what you do; they buy why you do it. If you talk about what you believe, you will attract those who believe what you believe."
Cheryl agrees. "The vision, more than anything, is what I refer back to at least a few times a week. It reinforces everything we do with clients and how we work as a team."
Doing your homework
A key component of a business plan is doing your homework. This includes an analysis of your target market, competitors, industry and even suppliers. It can sense-check your purpose and ensure that your business is viable.
"For example, if you are targeting prospects within the radius of a commercial estate where there are a lot of blue-collar industries but your purpose is to specialise in white collar industries, well that’s not going to work," says John. "Know where you want to focus. Data is key. Does the analysis align to where I want to grow, does it align to what I want to do?"
Similarly, "Understanding others in your field and knowing what’s going on in your local market can put you in the best possible position to build a really strong rapport with customers and help you adjust your style or your pitch to be successful."
Tools like a SWOT analysis can help you map your data so that it is easy to refer back to and update if needed. Cheryl took this one step further, by analysing her own strengths and weaknesses prior to the launch of her business.
She believes that "if you’re going in blind and aren’t aware of where your personal strengths and weaknesses are, it’s going to make it very tough to start up your business… identifying quickly where your gaps are means you can tap into the resources needed to be as effective as possible."
Setting your objectives can set you up for success
Once you have your purpose, your target market and analysis, it’s important to set some measurable goals for yourself. For Cheryl, that meant setting up one year, two year and five year objectives so that "I was really comfortable with what I wanted to achieve and could then plan backwards from there."
For Authorised Representatives, John believes "the easiest way to measure it is through revenue." However, he urges business owners not to discount the goodwill that their brand generates in the industry, communities or markets they are in. "If you’re well known, well established and are the subject matter expert in your community… you’ll get more opportunities."
Including objectives around market share or brand recognition alongside financial and strike rate targets can help set you up for success. It also means that when you review your objectives further down the line, you know which areas you need to hone in on.
"I review our business plan every quarter to assess how we are tracking against our established objectives," says Cheryl. "Have we reached our objectives? Have we reached our targets? It is a good process to validate if we are on the right track and if any adjustments are required."
John agrees. "Review your plan every quarter. Are you on track to achieve your goals? If your trajectory is ahead… give yourself a stretch target. If you’re behind on the plan and know that early on, then you can make changes."
"If you don’t have a plan and you’re behind expectations, when it comes to the end of year financials and you’ve just realised you’ve not had a good year… it can be too late."
Lean on your network for support
Starting a business on your own may seem daunting, but the key is to remember that you don’t have to do this by yourself. There are resources out there – from government websites to local universities, your own network and your insurer.
"I definitely leant on my personal network," says Cheryl. "I presented my plan to a few friends and family members that had established their own businesses, which was invaluable in setting up and adjusting my plan."
"Having a strong network is so important, it’s critical to your success," John agrees. "A network of peers who have blazed the trail before you. What are the lessons you can learn from them? And your partner network, our role as an insurer."
Whether you’re about to launch your own business or are a few years in, it’s a good idea to reflect on your plan and lean on your network for support. To help you reach your goals, we’ve created a handy business plan template for you to fill out. You can also give your Business Relationship Manager at QBE a call to chat about how we can assist you.