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Why do I need one?
Well, of course you will already have some kind of a plan for your business. After all, it’s unlikely you will have chosen how you wanted to spend your working life just randomly out of thin air. However, we’re not just talking about the aspirations you may hold in your head, we’re talking about putting those aspirations into a tangible written document that will form the basis for the development of your business.
A business plan is an essential tool if you’re looking for funding or investment but, more importantly, it’s also fundamental in enabling business leaders to focus on the desired direction of the business and the strategies required for getting where they want to go. If you don’t really know who you are, where you’re going and how you plan to get there, why would you expect anyone to finance you?
In fact, it could be argued that the process itself is ultimately of more value than the end product. A business plan is not set in stone. It will always be a ‘moveable feast’ that will change over time and be influenced by varying circumstances and financial climates. The research, thought and discussion necessary to prepare the plan will enable you and your team to look at each area of your business in a thorough and systematic way that should ultimately reinforce the primary vision and values of the company.
So, before you put pen to paper, the first step should really be to take a look at your business as it is at this moment in time. Before you can say where your business is going, you need to define exactly who you are, and what you stand for, as a company. You need to define your brand.
After that you should think about where, ideally, you want your business to go. Look beyond prevailing economic factors and set yourself a long-term goal. At first sight it may seem ambitious but you must have something to work towards.
Lastly, how are you going to get to your goal? This will be where your brand strategy comes in, and should encompass all the vision, values and behaviours of your company.
Once you’ve established these things you can really start to think about your business plan and what you’re going to use it for. More often than not the main reason companies produce a business plan is for funding. This may be from the bank, investors, grant providers or potential partners or buyers. Your plan could, however, simply be a document for internal use and based on a different set of criteria.
Whatever your target audience, the important starting point is to make sure the plan is written with them in mind, so:
Understand your audience
Only include subjects relevant and useful to them.Take enough time
Don’t be tempted to rush things. Time taken at this stage could well save expensive mistakes later.Don’t write too much
You’re not writing a novel. Equally no-one will relish ploughing through pages and pages of dull facts. Keep it interesting but concise.It’s tempting to incorporate everything including the kitchen sink, but remember that people will rarely relish the prospect of ploughing through a document resembling ‘War and Peace’ and may quickly lose interest and miss the point. In fact, the most important part of your entire document is the Executive Summary. This puts, in a nutshell, exactly what you want and what you plan to do.
Executive Summary
As we’ve already said, this is the most important section in your business plan. Although it appears at the beginning of your completed document, and is the thing that every interested party will definitely read, it should always be written last, once all your information has been collated and put in place. It’s likely to be the most difficult part to write as it needs to sum up everything that’s included in your plan in such a way that the reader wants to take a look at the rest of your document.
Don’t make it too long - a couple of pages should suffice - but make it interesting, factual, and include all your important points. If you’re looking for funding, be clear about how much you want, how you intend to use it and how you will pay it back. If you’re looking to sell or take on a partner, you need to show why buying out or buying into your business would be a sound investment.
So, what do you include?
Writing a business plan may seem, to many business owners, like a real, and possibly unwelcome, challenge, especially when it comes to knowing what to include, what to leave out and where to find the necessary information.
Obviously, for the reasons mentioned earlier, it will depend on your audience and what you’re trying to achieve. If your plan is for investment then, as a general guide, it should include:
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Company Details
Basic information of who you are, where your business is based, etc. -
Executive Summary
Your synopsis as mentioned earlier. -
Products and Services
What you sell, to whom, benefits and features, business opportunities, etc. -
Marketing Plan
Marketing and sales strategy including target markets and competitors. -
Operational Plan
Your working environment, facilities, equipment and operational procedures. -
Management and Personnel
Your management team, company structure, staffing levels and skills. -
Financial History and Forecasts
Where you’ve come from, where you are at now and what you anticipate for the future. -
Appendices
Any additional information that may be helpful, but not essential, to support your plan.
This list is not definitive and only outlines the main areas you need to cover.
Who writes the plan?
Although the thought of writing a business plan may seem a little daunting, don’t be tempted just to pass it off to an outside agency to write it for you.
Without doubt, you are the best person to write your own business plan. You know your own company, what you do, what skills you and your team have and you know your vision for the future.
Others will be available to help you including, for example, your accountant, who can help you with the financial details and offer advice on whether your plan is ready to present to your audience.
Remember, whether your business plan is for an outside body, to gain financial backing, or for internal use to aid your team in focusing on your goals, it’s vital to have a constructive, well thought out document. Months down the line, once your plan has been written and the ‘dust has settled,’ it could be very easy to fall back into old patterns of working and ways of doing things, but regular reference to your plan will ensure that you stay on track and, as far as it’s in your power to do so, you will reach the goals you want to achieve.
Unlocking Your Potential