You may think to yourself…“I know my business and it’s potential – why do I need to have a business plan? It won’t make any difference to things to write it down”.
The issue here, is that other people can’t get inside your head and have a full understanding of all your ideas and thoughts. Your staff, lenders etc. can benefit greatly from a Business Plan. At the end of the day you also benefit from their help.
Lenders need to be confident you’ve thought of everything and have a clear picture of your goals, aspirations and potential pitfalls. Staff need to understand the overall objectives of the business, so they can be part of the team to get you there.
This is why you need to get it out of your head and down on paper. In the process of putting together a Business Plan you will smooth out the process of building your business and engaging others to help you build it.
Some benefits of a Business Plan
- Provides a clear roadmap for business development and growth for you and your team (which might currently be just you, but think of the future).
- Helps you to secure finance to grow.
- Creates strategies to achieve your goals.
- Helps you to avoid pitfalls you may not have considered.
- Helps you to prioritise actions for maximum efficiency.
What a Business Plan should include
- Details about the business such as name, structure, location, date started, owner experience.
- Information about your products and services, market position, unique selling proposition, anticipated demand, pricing strategy, value proposition, growth potential, R&D plans, intellectual property strategy.
- Research of the market for your product/service, your marketing strategy, customer demographics, key customers, customer management, competitors, advertising, sales.
- Your Vision, goals and mission.
- Finances, insurances, risk management, legal considerations, payment methods, credit policy, finance required, start up costs, budgets for Profit and Loss and Balance Sheet, Cash flow forecast, Break-even analysis.
- Operational plans e.g. production, suppliers, plant and equipment, inventory, technology, communications, quality control, affiliations, environmental impacts, community impact and engagement, distribution etc.
- SWOT Analysis i.e. your strengths, weaknesses, opportunities and threats.
- Staff plans including Organisation Chart, recruitment plans, training programs and skills retention strategies.
Producing a Business Plan is a great opportunity to work with others to help you develop your ideas and bounce ideas off each other. They could be your current team or a Business Advisor. This is a great time to start building a trusted team around you for the future.
Once your Plan is done you also need an implementation program for the strategies in your plan. This will entail prioritizing the tasks e.g. you may need to do some market research before heading off and developing a product that you’re not sure anyone will buy.
Once you’re confident there’s a market, you need to work out what it will cost to deliver the product/service before setting a price, as well as researching competitors’ pricing and so on…
For a loan application or crowd or other funding you will need a plan. It serves as a source of inspiration for yourself and your team to build a picture in your minds of the type of business you want to build into the future. As well as an exciting vision of the future for you and your team a Business Plan needs to be used as a current working document and visited regularly as an overarching ‘Action Plan’ for your business.
One final thought on Business Planning … the financial side of things is the most vital issue. Profit and Cash flow are the lifeblood flowing through the veins of the business and if they dry up, you won’t be able to survive and reach your goals and aspirations. This is often overlooked in the excitement of getting a new project off the ground. It pays big dividends to get some help with this aspect from someone who really understands the ‘big picture’ financial issues surrounding business start up and ongoing management.