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Whether you are in the process of starting a new business, or you have a business that isn’t running as efficiently as you would like, a business plan is a great tool to help you achieve your aims.  Business planning is sometimes called strategic planning or business development.  They may be a relatively simple or hugely complex.  The name and format is not important.

The primary purpose of a business plan is to help you achieve what you want from your business.  There is no point in copying predefined wording or trying to force ideas around jargon such as mission statements, KPIs or limiting resources.

Your business plan will also help your bank, accountant, insurance company, landlord and any other adviser.  You may also want to prepare abbreviated versions that explain your business to other parties including employees.

Your business plan allows you to get on with detail of running your business in the happy knowledge that the plan contains your overview of the whole situation.  You can then make day to day decisions that will always support your overview, without having to analyse your entire business each time.  By making a review and update of the business plan part of your monthly procedures you will ensure the business is going in the right direction and ensure your financial affairs are in order.

If you have never written a business plan it can appear daunting.  The first step is to look at some of the excellent guides available.  There are two key rules:  keep the plan simple and keep it realistic.

Put simply, you then need to open a word document and start recording your ideas.  Any structure is fine, but if you are stuck you may wish to use the headings given below.  Do feel free to amend, delete and add to this structure.  The following headings are simply provided to help you make the first step:

Executive summary: A single page (maximum) overview of the whole plan.  Presented at the beginning of the plan but usually prepared last.

You and your business. Who you are, perhaps your CV or similar information, and your business idea.  This will include all main contacts, bank account, company, legal and trade association details.  Property and/or equipment owned or required will be listed here.  You will also include details of what you are trying to achieve.  You may want to prepare a hierarchy of targets with (any of) a vision, a mission, objectives, goals, and targets.

Environmental policy: It is good practice to be up-front about how you will position your business in terms of the environment. Browse our Environment section for more information on formulating an environmental policy.

Internal factors: These are often presented under the headings of Strengths and Weaknesses.  You may prefer headings of Skills, Resources and Requirements.  The headings are not important.  Include all the reasons you will succeed and any factors that you feel will limit you.

Sector and competitors: Some brief details about the industry that you operate in.  Note competitors, market trends and any observations that support your decision to be in business.

External factors: These are often presented under the headings of Opportunities and Threats.  You may prefer headings of Legislation, Market or social trends,  Technological changes and so on.  This is a review of the world outside of your business and how it will affect you.

Goods and services: What you are going to sell.  Include details such as why there is a market (customers) and how your particular business can meet customer needs.

Customers: Include prospective customers and networking opportunities.

Marketing: Details of how you will generate further prospective customers and convert these prospects into customers.

Job descriptions: If you have staff, or are thinking of taking people on, then record the job descriptions and particular tasks here.

Financial forecasts: Forecasts are the most important part of a business plan, and should be prepared even if none of the other items are attended to.  You need to have a good understanding of what cash flow and profits are likely to arise.  This can then be tested against optimistic and pessimistic scenarios.  Your monthly financial records can then be compared against budget.  There is no better way of managing the finances of your business and this can all be implemented very simply.
If you have already thought carefully about and researched your business idea then the business plan can usually be written up over a weekend (possibly excluding the forecasts).  Of course if you are starting the process from scratch then each of these headings may take a great deal of time in reading and considering.

Once you have the business plan then keep it as a live document.  There is no need for formalised printed copies.  Save the file with a date reference in the name, then each revision can be saved with a new name creating a history of your business.  Of course the only important plan will be the latest version, not the first version, so keep the latest version of the business plan as a key document that you can refer to and update at any time.

 

If you would like to discuss this or anything else please book a chat about your business here.