Simply put, every business needs to have a business plan written up and kept close to hand. From explaining market opportunities and attracting potential investors to providing a path for your company to take, it’s an essential document. If you don’t know where to start, however, then creating such an extensive document can be daunting.
For those looking to fine-tune the future of their business, we’ve produced this helpful resource on how to create a business plan. Whatever the sector your business works in, be sure to consult this handy how-to and get ready to plot a course for success going forward. We’ve even provided a free template as a starting point when you’ve finished reading.
A business plan makes clear the objectives of your business, what you need to do to make things happen, and any pain points that you may meet along the way. It allows you to bring into focus what needs to be prioritised and what you need to spend more time on.
A properly crafted business plan will:
Remember, a business plan is something you should keep reviewing and updating. Allowing it to collect dust at the bottom of a cabinet is be a big no-no.
Before you begin writing your business plan, there are a few things to keep in mind. Consider the following:
In-depth facts and figures should go at the end. For example:
Whoever the audience is, write your business plan as if it’s aimed at an outsider. That means you should include company or product literature in the appendix.
You’ll need to know your product, market and objectives inside and out, so be sure you’re spending plenty of time researching, evaluating and thinking about what should go into your plan. Get to know everything you can about your audience and industry; the more of a foundation you can lay out, the more you’ll be able to build on.
As we’ve mentioned, there are many different things a business plan can be used for. It’s up to you, however, to decide the actual purpose of the document. From here, you’ll know what to tweak, emphasise and accentuate; if you want to attract investors then the plan would look different to that of one designed to provide the business with a road map.
Perhaps the best jumping-off point to a business plan is the creation of a company profile. By crafting a solid definition of the products and services you offer, your target market and audience, any resources you have, and what makes your business unique, you can underline what makes you tick whilst also using it to attract customers, investors and talent. Once your company profile is in place, it will make getting started on your plan a lot easier.
How will you market yourself to any potential customers or investors? In answering this question, you’ll need to be able to create a profile of your ideal customers, including what they like or dislike. Doing this will help you understand how to position your product or service, as well as how to price what you’re offering. Also, important to note is how your customer base is likely to change over time – whether that’s an increase or decrease.
Combine both descriptions and analysis when completing this aspect of your plan, and be sure to include a SWOT analysis (more on this later) of each area. This will show the reader that you’re realistic about prospects. It’s important to note who your competitors are too; ignoring them suggests to the reader that you’re overlooking a major problem.
In writing up this section, you'll want to identify marketing objectives, such as:
Of course, these objectives will all have varying costs associated with them. Therefore, they'll need to have a section where budget is allocated for each planned activity; consider creating separate budgets for internal hours (staff time) and external costs for out-of-pocket expenses.
The finance section should include all the financial data for your business. If you’ve started trading, then be sure to mention any of the previous years’ accounts as well as details of any outstanding loans or assets. Additionally, current management accounts, cash flow forecasts, and a breakeven analysis should be highlighted too.
Any financial projections you make should be realistic and outlined with different scenarios for dates, costs and cashflow for both the long and short term. It may be tempting to massage or dress up the figures, but if you’re looking for investment, then any potential investors are likely to see through it. Likewise, be realistic about your costs; spreading an equal amount of your marketing budget across the whole year is an unlikely-looking scenario.
This section should make note of the background and experience of all the key members of the management team. Attach CVs for each individual and outline the strengths and weaknesses of the team as a whole. If you are missing any skills within your management team, then equity investment can help out in this regard. Any investors in your business will have a wide network of contacts that may be able to join the board in non-executive capacities.
With the above elements now all fully formed, you're in a better position to write the first thing that appears in your business plan: the executive summary. Part of every big business decision that a company has to make, the executive summary acts as the initial point of contact with your audience, whether that may be customers, investors or other members of staff.
In this summary, you'll state the company's mission statement, i.e. a few sentences that truly sum up what the business does for its clients, your aims for the company, and what makes you stand out amongst your competitors. Combining your business' current situation with its future aspirations, it should be a powerful, concise statement that's persuasive, convincing and realistic.
In no more than 1,000 words, the summary should capture the audience's attention in a way that gives them a feel for the business. Think of it as an elevator pitch; it needs to be punchy from the first word to the final full stop.
It's a good idea to front-load the summary with your business' most impressive credentials. Make mention of any companies you've worked with or other investors who are already on board. You might think these should be saved until the end, a judicious ace in the hole that's going to seal the deal, but the reader may not even make it that far.
The problem and the solutions you provide should be clearly stated. Use common terms to make this section as transparent as possible. Outlining your competitive advantage also comes in useful here; if you have any patents or intellectual property, then mentioning them upfront can be valuable, as can a summation of the business model.
The dos and don'ts of executive summaries:
Carrying out a SWOT analysis helps you to understand the business and the key external factors that you need to deal with. In your business plan, include a one-page analysis of the strengths, weaknesses, opportunities and threats associated with your company, for example:
In the context of business, you can use this to carve out a niche for yourself, identifying undiscovered advantages. Through understanding your weaknesses, you're better placed to manage and eliminate threats that could otherwise catch you off guard. This then provides you with the chance to stand out from your competitors.
Now you have your business plan in place, there are a few directions you can take to help progress your business:
All stakeholders and key members of the team should receive a copy of the business plan, ensuring everyone is aware of the set-in-stone business targets. Additionally, you may want to highlight to individuals the parts which may be of interest to them.
If you’re dedicated to ensuring you meet all the targets set in your business plan, it’s important to implement a series of KPIs. These small steps could help you stay on track and ensure your business plan is a success.
Make sure you’re measuring your performance against what is stated in your business plan by holding monthly reviews of your progress. If you’re falling behind your plan, you may need to make some changes.
If you have a series of targets in place, you’ll need a place for the whole team to record their progress. Building a shared comms dashboard – using a tool like Basecamp or Trello – where all members of the team can input their progress can help keep everyone on track.
If you are unsure of how to achieve any part of your business plan, contacting dedicated consultants could be the suitable next step. Securing expertise could be the difference between success and failure.
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