The Business Plan
Every business should have a business plan and is essential when starting up. It is a written document that describes the business, itís objectives, itís strategies, the market it is in and itís financial forecasts. It has many functions, from being able to see what the business is and where it is going, to securing external funds if required and to measuring the success of the business. It is a statement of intent and should provide details of how the business is going to develop, when it is going to be done and by whom and how the money will be managed. Having this document from the beginning will allow focus and the best chance of success.
It helps you to define your goals and strategies, it will be changed and updated on a regular basis, but it will help you, to keep things in perspective. You can then refer back to it when things become confusing or complicated. It allows you to develop a professional attitude to your business, which not only helps you to increase your earnings, but also help you to finance your business.
Everyoneís business plan will be different, as objectives will be different, but there are certain common factors that make up a business plan which will help your business grow.
Some tips on putting a plan together. Keep it short, producing a plan the size of a manual will not get read. Think about presentation and keep it professional although it doesnít have to be costly, it is merely giving an impression of the business and is a functioning document that will be used. Writing skills required, limit the use of jargon, ensure it is legible, a typed or word processed copy is best, edit it carefully get a least two different people to read it and check it makes sense, and avoid putting important information like market research data or balance sheets in appendices, keep it within the body of the text. Finally make sure it is realistic.
It should include:
An overview of the business or sometimes called the executive summary. This will identify such items as
Short descriptions of the type of business, what is going to be sold/services you are going to offer and who to. Here you should also include any future gaols or avenues you would like to explore, stating your clear objectives. This is so you can check at a later date whether your objectives are on course, or if you have got sidetracked.
Markets and competitors Ė Here you should be able to demonstrate who your customers will be, as well as where your market will be, as in wholesale or retail or a combination of both. Clearly define your opposition, as well as their strengths and weaknesses. This should include ways you may be able to exploit any gaps in the market.
Marketing and sales strategies, why will people buy what is being sold.
The marketing section within a business plan should be in overview. To fully exploit all the marketing opportunities available to you now and in the future you should do a more detailed Marketing Plan.
Details of the management team together with any skills and experience they have
How it is to operate including premises, facilities, management information systems and IT requirements
Financial Forecasts, including, profit and loss and sales forecasts, but more importantly cashflow and budgeting forecasts, these alone will determine how you see where you money is coming from and going. They are important and essential tools for every business and should not be overlooked, they will determine how well your business functions, itís future and the amount of profit you will make.
This Financial Forecast should cover:
An important aspect of the financial statement is an assessment of the break-even point of your business, in other words the minimum you will have to take to pay your expenses.