11 August 2021
For some, the thought of writing a business plan can be very daunting but if you are passionate about your business, you need to be willing to do the research required to give your business its best chance of success.
As an essential component of starting a new business or growing an existing one, a business plan makes you consider factors that will impact on your business’ success and can help determine whether the proposed business/growth will be successful.
What is a business plan?
A business plan is a document that defines business objectives, goals, and forecasts on paper.
It is a useful tool to help your business set the right course of action so your goals and targets can be achieved and it can help support your case when approaching banks for financing or attracting business partners or investors.
Tips for writing your business plan
To help you get started writing or refreshing your business plan, here are four tips that will help you write a useful document.
1. Make realistic goals
Outline the most cost-effective and practical way to achieve your goals. Incorporate these goals in day-to-day operations of your business.
2. Be clear and focused on what you want to achieve
Your business plan could be done in stages depending on what you want to achieve. It can be helpful to break it down into steps/stages to concentrate on piece at a time.
3. Keep it simple and ensure it is easy to understand
Share your plan (or parts of it) with employees so they understand the business’ focus.
4. Make it a “living document”
Refer to your business plan regularly and check how you are progressing against your goals. You may need to adapt the business plan if there are industry regulation changes or economic environmental changes such as we recently experienced with COVID-19 lockdown restrictions.
What should a business plan include?
To serve its purpose as a useful strategic document, your business plan should include the following elements.
A summary of your plan: Your summary should outline the business and your market(s). Include profit forecasts, your monetary requirements and your management structure, and summarise your past employment and achievements, and those of the people working with you.
The products or services: Describe what the business does, how it will be developed, any competition, and competitive advantages it may have such as patents applied for.
Market positioning: Who are your customers and your competitors, and how will your products be promoted and priced?
Operational details: Provide details of where your business will be based, who your suppliers are, and what equipment and staffing will be required.
Financial details: Include a summary of your business forecasts and budgets for at least two years, and past financial results (if available).
The prospects: Outline your short- and long-term objectives as the owner and define the financial outcomes you expect to deliver.
SWOT analysis: Undertake an assessment of your business’ strengths, weaknesses, opportunities, and any threats that could prevent its success.
Once you have drafted your business plan, seek feedback from your accountant and business adviser to challenge your content and thinking, and make suggestions on what you may not have considered.