Why you need a business plan
A well-crafted business plan is an important tool to help you manage, and grow your business. Its main aim is to set out your vision for the business, and the steps you will take to get there. It will normally set out your strategy for the next few years, typically between 1 and 5 years.
A good business plan will be a useful communication tool for attracting investment as well as letting your staff know where the business is going. Simply writing a business plan can also be a good process it will help you to:
· Think through and explain your objectives;
· Describe how you will achieve them;
· Focus and develop your ideas for growing the business;
· Work out what is important and a priority, and what is not.
Let’s look at some of the characteristics of a business plan. A good business plan should be….
· Short and to the point;
· Based on detailed information e.g. financial forecasts, market research (but not so detailed that it is long and waffly!);
· Include the assumptions you have made, but base them on reality not fantasy;
· Professional, even if it is only for internal use;
· Mindful of the audience, whether internal or external, investors or banks).
Now let’s look at some of the key features of a business plan…
· Your vision over the next 1, 3, 5 years? Be realistic.
· Your value proposition;
· What makes you better than the competition.
What objectives will make a significant difference. These might include:
- Finance - more sales, better margins, profitability;
- Customers - new customers, customer satisfaction;
- Products and services - improving existing products and services, or launching, new ones;
- People - recruiting new employees, developing new skills.
Set clear targets for these objectives and when you plan to achieve them.
Finally, how you are going to reach these targets? Have a step-by-step action plan for each one.
Your Business, products and services
· the history of your business, how it has progressed since starting;
· the structure and ownership of your business;
· your products/services and what makes stand out from the competition;
· a description of the industry/sector you are in;
Markets and competition
· the markets/segments where you operate/compete, including market share;
· what your customers look like;
· trends and the outlook for your markets/segments and the drivers behind these trends;
· your understanding of competitors, their advantages and disadvantages.
Marketing and sales
· where your products/services are placed in the market;
· your selling features (e.g. high price/quality or low price/volume);
· which products/services are most profitable;
· which markets/segments are most profitable;
· what channels you use to market and distribute your products/services;
· what relationship do your customers want with you.
· your management and staffing structures;
· the skills and experience of your staff;
· how you recruit;
· the training you provide for gaps in skills and experience;
· how you compare with the market in terms of staffing, skills, pay;
· any key staff that would cause a problem if they left.
Include what systems and process you have for:
· management information;
· stock control;
· regulatory standards/quality control;
· managing equipment, risk and limits to your capacity.
· historical financial information
o cash flow
o debtors and creditors
o capital expenditure
o balance sheet
· your forecasts for
· assumptions behind your forecasts
What are your:
Review your business plan, is it:
· Based real evidence rather than ‘fantasy’;
· Readable or a pile of gobbledegook.
If you need help with your Business Plan or want to know more about Business Planning Rob Whieldon can help you. Get in touch:
Email email@example.com or call 0775 172 3574