Why have a business plan?
At a high level a business plan can help you as a business owner prioritise, it gives your business direction and defines the objectives. A business plan maps out strategies to achieve your business goals and identifies the potential risks you might face along the way whilst recognising mitigating actions that may reduce or remove the risk.
A business plan does not need to be as hard as you might think, there is no right or wrong way to write the plan, it can help you reach those milestones and if you are after finance for your business, it will help the bank in reviewing your request and potentially lending you money.
In this post we will break down the components of a business plan and highlight key concepts within those components.
Analyse the idea!
First things first, we all have business ideas some good and some bad. Analysis of yourself and whether your business idea has a good chance of succeeding helps you understand the feasibility of the idea rationally. Analysis also helps you understand any challenges you may face with the idea and helps you overcome them.
Is your idea viable? What product or service will you provide? How will you protect your idea? Do you have the financial capacity to start a business? What skills do you need? Who are your competitors? Is there even a market for your product or service?
Analyse yourself!
Ask yourself why are you starting a business? What goals are you wanting to achieve, both personally and in business? Do you have the skills required? How much income do you need to generate? Starting your own business, what are the advantages and disadvantages?
These are all important questions you need to ask yourself and to answer as they form the basis of developing the business plan.
So, what does a business plan look like?
It need not be complicated and is simply broken down into five key parts.
❗ Business Summary – Leave this until the end; this is a simple one-page summary of the plan.
❗ Management Plan – Otherwise called an Operations plan this in a nutshell is the part about your business. It should cover key things about your business such as your structure, registrations, the locations you will operate, the premises you will operate out off, if you will have or do have staff and the products or services you will offer.
❗ Marketing Plan – This section should cover your marketing analysis of the industry you are entering, your customers and your competitors. Over and above this the marketing plan should also cover your key marketing goals and how you will deliver on these targets.
❗ About Your Future – As the title suggests, this section is simply about what you see the future of the business as. What is the vision statement, what are the business goals and what are the key financial targets?
❗ Financial Plan – How will you finance your business, what are the costings and cash flow, profitability, and balance sheet projections for your business.
These five sections encompass the whole of your plan. Whilst at a high level they are simple concepts but when getting into the detail there can be complexities that you might need a little help with. Relax, that is ok, seeking professional advice is readily available and it means you are getting a quality outcome and a quality business plan.
Now it is about rounding out the process and setting in place key useful tips to make building a plan not simply a once off set and forget.
It is ok if you are not quite confident in developing your plan there is plenty of support you can receive. A great start is to work with your accountant on developing that business plan. Attend business events is a great way to get your business known, stay up to date with the latest industry and local news and to build a network.
As mentioned, developing a plan is not simply a set and forget, regular reviews are essential to ensuring your plan evolves with your business along with tracking how you are performing against the plan.
Lastly the business plan is a blueprint for your business, how it will run and what the future direction is. Be careful with who and how you distribute the plan; setting in place agreements before sharing can be beneficial, particularly if your business idea has some unique intellectual property.
We have touched on a range of items that encompass the business planning process and key call outs the way. We hope this gives you the tools you need to start your business plan but please remember though there is always support out there to assist you with your business planning needs, getting the right advice can save you in the long run.
This is general information only. Contact us today for an obligation free chat about your business planning needs.