A business plan is a vital part of any business, it describes your entire business on paper. The business plan should cover objectives, strategies, sales, marketing and financial forecasts. These will help you make a great business plan, which can be used for internal use or to attract investors.
Here there are some general tips, which will ensure you have the best possible business plan to fulfil its purpose.
1. Tailor your plan to suit the audience.
If you’re after investment, the tone and content of your plan will be markedly different than a plan written purely for internal use, for you to measure your achievements against your original goals, for example. In any case, the business plan should be written in simple language, making it specific through attention to detail.
2. Pay particular attention to the executive summary
The executive summary is your chance to provide a clear statement of intent to potential partners / investors, or even the bank manager. This part of the plan appears at the very start, so you need to impress. The executive summary of your business plan should be concise enough so it should give a good idea of your business idea/plan is.
3. It’s a working document
A business plan isn’t something you create once, and never refer to again. You should update your plan regularly, and measure your progress. One of the main reasons for having a business plan, especially if it’s only for internal use, is to continuously set objectives. This way, small milestones and long term objectives can be tracked. You should also consider creating a timeline in order to keep and visualise the future of your business.
4. Know your market
Most contestants on the Dragons’ Den are hopelessly unrealistic about their future business plans. You should research the market thoroughly, analyse the competition, and put in place some contingency measures. A business plan will help you foresee any problem that you may face.
5. Do your sums and know your finances
Following on from the previous point, unless you are completely realistic about what you are trying to achieve, and the potential obstacles which stand in your way, then your financial projections will be wrong. Always be conservative with any sales or profit predictions, rather than the other way round. Do your research, make sure you are aware of what you want from any potential investors. Show them that you have a good idea of what the finances for your business will look like.
6. Your management team
Include some background to the people behind your business. What skills does each individual provide? What roles and responsibilities do members of the team have? Just compiling this information may help you see if you have any gaps in expertise which may hinder your future chances of success. This will again help you spot any flaws you may have in your plan.
If you are writing a plan with investors / business angels / potential partners in mind, you should provide details on how and when investors will see a return on their money. Again, be realistic with your figures, and be prepared to back up any questions you are asked with solid, well-reasoned forecasts.
Many company owners forget to work out how they plan to deliver their goods or services to market. You may have identified a clear demand for a product, but you have to brand, package, and distribute the product first, before you can start to make money.
9. Keep a structured layout
Most business plan experts will recommend you keep your plan within a certain structure. For some examples of commonly used sections in a business plan, you can look up business plan templates. These will help in making your plan structured making sure you don’t miss out any vital details.
You can find a wealth of business planning resources online. Try The Prince’s Trust as a starting point for a good, downloadable template (Word).
10. Useful Exercise
Even if you have a cynical view of business planning, you may be surprised at how useful the exercise of writing down your thoughts, visions and hopes for the future can be. You may identify pitfalls in the way you currently plan to run your business, or identify areas where your company is inefficient. This will prepare you for the future of your business, and give you a realistic idea as to what is tome in the future.