In our previous blog, we covered the advantages of writing a good business plan. Remember, it doesn’t have to be perfect. The fear of it needing to be perfect puts people off from writing a plan in the first place. A good plan is always evolving and operates as a working document.
Here we describe some great tips for writing a workable business plan, some of the detail you may not need if you are only sharing this with your business partner. Or you may need more detail if you’re using the plan to show an investor or to raise finance.
Either way, we believe strongly in business planning for the clarity, focus and actionable plans they provide. It’s a living document, designed to evolve and provide growth for the business.
Good business plans will always cover the following:-
Set your stall out with Vision and Mission statements – A clear compelling vision helps align everyone towards the same future and a strong mission statement provides the basis for the plan to achieve this vision.
Description of your company and its product or service – describe the legal form of the business, the company and the past performance, if it has one. Describe how your product or service is different and create USPs.
Analysis of the market, customers and competitors – the more you understand these elements the better your chances of success. Integrate customer behaviour and feedback into the plan. How do you measure against your competition, their price and service? How do you differentiate from them? Think of yourself as the consumer. If you are just starting up in business, learn as much as you can about the customers you want to target, the industry you want to be in and where you see yourself fitting in.
The plan of action – working forward from where you are today, what type of market share do you believe you can secure, how can you grow? Identify your marketing and sales strategy. Forecast your sales and your cost of sales. Consider the branding of your product or service, how you are going to advertise, and promote to reach your target audience. It’s important to define clear milestones, assign responsibilities including dates and budgets. Continue to follow up with these responsibilities and track the results.
Describe the key management team – name the team, their previous successes or any gaps and illustrate how this is going to be addressed.
How the financials stack up – Set out in detail your financial strategy and how it supports your projected growth. Include a break-even analysis that shows risk as a matter of fixed vs. variable costs. Include projected profit or loss, cash flow and balance sheets.
The cash flow statement, either projected or actual should show where the money is coming from and how you are spending it. Cash flow is vital to a business and it gets misunderstood as profits. Profits don’t guarantee cash in the bank. It’s not uncommon for profitable businesses to go under, but companies with positive cash flow can pay their bills.
The Summary – Now that you have written your plan, summarise with a succinct synopsis of the entire plan.
If you are in doubt or lack time
Why not call in the experts and add real value, we have many years of experience working with different types of successful businesses and can share this knowledge with you, significantly reducing your time pulling a plan together. We provide our clients with a variable planning and budgeting resource, so you always have an easy to use practical planning tool at your fingertips to grow and prosper the business.
If this has been of interest and you would like more information on how we can help you, please contact our office on 01253 899989.
