Successful entrepreneurs are obsessive about setting goals and working
methodically to achieve them. Your business plan is your opportunity to record
your vision, plus the practical steps that will make it a reality.
It’s amazing how many business owners get by without a plan. While it’s
certainly possible to start and run a successful business without a written
business plan, you’re doing yourself no favours.
For a start-up, a business plan is an essential pre-requisite when you’re
applying for business finance. But that doesn’t mean it’s something you write
once for your loan application then leave gathering dust. A well-written plan
is a tool you can return to again and again.
The good news is that it doesn’t have to be a telephone book. In fact, as long
as you’ve covered the essentials, then the shorter the better. Start by
downloading our business
plan toolkit, and then follow these five steps.
Step 1: Dream it
Start by setting out your strategic vision for your business. Where do you
want your business to end up? Everything you’d want to tell a potential
investor, partner, employee or customer should be here, including:
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Your vision. While it only needs to be a sentence long, your vision
statement may be one of the hardest things you’ll ever write. It’s important to
get it right — brief and aspirational, yet achievable.
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Your unique selling proposition. This is your competitive edge, the
unique quality that keeps customers coming to you instead of a competitor.
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Your target market. Rather than trying to be all things to all
people, you can increase your chances of success by targeting a well-defined
niche.
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Your products and services. Once you know your niche and unique
selling proposition, you can design your portfolio of products and
services.
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Your goals. Key goals for the period covered by the plan. Make them
measurable, achievable and consistent with the financial plan.
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Capital requirements. If you’re using your plan to apply for a loan,
state how much you need and what it’s going to be used for. Your figures should
be supported by calculations in the financial plan.
Step 2: Design it
You're ready to start designing the business in detail and putting some
strategies in place. Here are some of the things you may cover:
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History and structure. The operating history and structure of the
business, including the key people — the shareholders, directors, managers and
staff.
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SWOT analysis. SWOT stands for “Strengths, Weaknesses, Opportunities
and Threats”. A SWOT analysis is where you write down all the internal
Strengths and Weaknesses of your idea, and the potential external Opportunities
and Threats. It is a great way to test your business model.
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Business assets. The assets you currently have or need to acquire,
including premises, plant and equipment, information systems, intellectual
property, licences and insurance.
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Goals and milestones. Set out your major business goals for the
period covered by the plan, then set milestones for each step along the way.
Try to make your goals specific and measurable.
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Your business strategies. These include your marketing, sales and
customer retention strategies.
Step 3: Test it
You need to see if you can break your business model, by testing it for
weaknesses. If you haven’t already researched your industry, your market and
your competitors in detail, now’s the time to do it. These sections of your
plan include:
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The competitive landscape. Detailed information about the industry,
the size and characteristics of your target market, and the strengths and
weaknesses of your main competitors.
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Financial forecasts. These might include calculations of your
start-up costs and capital requirements, cash flow, profit and loss and balance
sheet forecasts, and a break-even analysis.
Step 4: Redesign it
Your next step is to re-consider your business model in the light of your
market research and financial projections. How can you counter the strengths of
your competitors, or overcome the weak points in your own business plan? Do the
assumptions you’ve made around key figures like potential sales really make
sense?
Having updated your business model, go through your plan one last time to make
sure it’s current and complete.
Step 5: Put it to
work
Once your plan is complete, don’t stick it in the bottom drawer. Treat it as
an essential business tool, and if your goals and circumstances change, update
the plan. After all, it’s a working document.
