If the first question that springs to mind is ‘do I need a business plan?’ the answer is a very simple ‘yes.’
Whether established business or concept-stage start-up, the business plan is a nuts and bolts action plan, an essential tool for both marking out the future and reviewing the course along the way, says Simon Joyce, director of Anchor Vans. Here, he gives his views on how to get your business plan right.
What is a business plan?
In short, a business plan is a document that states the business goals and how they will be achieved. Every business should have a business plan. It might be a brief one-pager or it may be an all-encompassing report including marketing and finance plans.
Reasons to create a business plan
The business plan is key when applying for a loan or convincing potential investors, in fact this will be the only time many business owners will even use one. But aside from raising funds there are many other overlooked benefits to writing a business plan and referring to it on an ongoing basis.
The Young Entrepreneur Council in New York asked some of its members to give their opinion on reasons to write a business plan. The answers they gave ranged from developing a better understanding of the market to reaffirming the figures and measuring success, all pretty positive stuff when working to drive forward a business.
In itself, the process of writing a business plan allows for a step back from being absorbed in the business, it forces time for research and evaluation and brings greater clarity on a strategic level. The business plan will assist in steering the business from A to B, identifying possible problems and helping to manoeuvre around them.
Writing a business plan
Consider who your business plan is for. It may be aimed at potential investors, attracting business partners or simply for personal reference in developing your business.
Write your plan with the target audience in mind, anticipate the questions they might ask and include information that will be of particular interest to them.
Write your business plan so that someone from outside of the business will understand exactly what your business is about and what it aims to achieve.
Keep content short and simple, cut the waffle, it should be concise and easy to read. For a plan that is longer than a couple of pages be sure to include a contents page.
Your business plan should be individual to your business, typical content may include:
- Executive Summary
- Company Summary
- The Market/Market Research/Strategy
- Competitor Analysis
If the recipient looks at nothing else in the business plan they are going to read this section. Your executive summary should outline the entire plan. Save writing it until the end, so you can easily summarise the plan, and use it to capture your audience’s interest.
Are you able to explain how your product or service will benefit your customers? If you are unable to put forward an argument for this, it may be worth revisiting your business idea.
Work out what makes you unique. What will your business offer that no one else does? Differentiating your product and/or service from the rest of the market will help make you stand out. Remember that this applies to more than just your end product, it encompasses your whole brand experience. Make sure to express this in your executive summary.
Check out the video from HubSpot Marketing for more detail.
The brutal reality, at the very base level a business plan will outline whether a business idea is viable or not.
Realism is fundamental to creating a business plan – ensure your business goals and expectations are clear and realistic – be your own critic!
Confidence in your business proposition is essential, a certain level of optimism goes a long way – and also creates interest, however unrealistic goals will inevitably cause disappointment further down the line.
Over-inflated sales figures or underestimated costs will be obvious to potential investors and reduce your plan’s credibility at the least. If maths is not your strength, it might be worth obtaining some assistance or having an expert glance over them first.
Know your market. Conduct in-depth research and present your findings. Establish that there is a market for your product or service, show that you know where your target market hangs out and be clear on the competition.
Consider likely issues, such as competitor activity, and address them in the business plan. This forethought will help to highlight bumps in the road in advance, and give you time to work around them – or change your plan. Acknowledging potential problems and having strategies in place will be reassuring to investors and also give you peace of mind.
When writing a business plan there is a fine line between optimism and realism. Finding the balance is crucial, especially where investors are concerned.
A business plan should be clear and easy to navigate at the very least. Include a contents page and make sure the document order flows well.
If your plan will be viewed by anyone but you, ensure it is typed, spell checked and grammatically correct.
Fancy presentation is not necessary but it should look professional. In some cases a PowerPoint presentation may be useful.
There is a wealth of information available at your fingertips, make the most of the internet, you will find countless templates and examples of business plans.
Revisit your plan
Remember that your business plan will be helpful in the future. Don’t forget to review your plan at regular intervals, updating and referring to it as both your business and the economy changes. Your business plan is essentially your roadmap.