What is a business plan?
Think of a business plan as being the blueprint for your business. It will set out everything from what your business is about, your vision for the future, your goals and how you plan to achieve them. Not only is a business plan a great way to understand what it is you would need to ensure the success of your business, but also a tool when applying for finance.
Developing your business plan can help you in the process of establishing a new business as well as focusing on the growth of your existing business. Your business plan is also an important document in demonstrating the capability of your business when considering applying for business finance or seeking investment from a third party. Your business plan should therefore be well researched, clear and concise.
While every plan is unique, there are a few things to consider when developing your own. You can also contact your business banking specialist if you'd like help to get started.
1. Business overview
In setting out an overview of your business it is important to consider relevant details such as your business name, structure, vision statement, your goals and business objectives. This might seem fairly straightforward, but it's important that you have a well-defined vision for your business and clear line of sight on what you are seeking to achieve.
2. Your key people
Whether it's just yourself or you have a team of people working for your business, you'll need to be confident that you have the expertise and knowledge to run your business successfully.
You'll need to consider things like your team structure, the technical and management skills required within your business, qualifications and relevant industry expertise. Having the right people and structures in place for your business are important considerations for any successful business.
3. Management and operational plans
It’s time to start adding those important details that will underpin your vision and achievement of your business goals. This is a vital step in the development of your plan as you must be able to demonstrate the strategies that you have in place.
This will not only include the initiatives that you have in place to grow your business but also set out your plans in how you intend to operate your business, a description of your product or service, current assets, resources and risk management strategies.
4. Your market place
In any business plan it’s important to identify and understand the current marketplace and where your business is placed in comparison to your competitors. This will include demonstrating your knowledge of your target market and how your business can best service their needs.
A good way to prepare for this part of your business plan is to undertake in-depth market research. You could consider seeking professional advice in undertaking this research, although if you plan on doing this yourself, here are a few important areas to consider:
- What is your market and what are the industry trends both locally and internationally?
- What is the gap in the market for your product or service?
- What are your competitive advantages?
- Who are your potential customers, competitors and suppliers?
- How much will your customers pay?
Once you have completed a detailed analysis of your market place you should be in a good position to develop your marketing plan.
5. Your finances
Having well prepared financial statements are crucial for setting your business goals and making sound business decisions, as well as tracking the on-going financial health of your business.
Ideally your business plan should set out the financial objectives for your business including sales and profit targets as well as other financial management goals. It should also set out how much capital you'll need upfront, what proportion you will be contributing and how much funding you may be seeking from other sources.
Your business requirements should be supported by financial forecasts such as profit and cash flow forecasts which should be under-pinned by a sound basis of assumption.
Seeking professional advice in developing your financial statements from either your accountant or business specialist is an important consideration at this stage of your planning.
6. Put it into action
Good preparation is a key ingredient to achieving a successful outcome. Having completed your business plan, you should now be ready to start implementing your business strategies.
You might have the best business plan in the world, but it will be the meticulous and careful execution of your plan that will generate the results. Don't just stash your business plan in the bottom draw. It should remain a fluid document that you review regularly and are ready to modify or fine tune if there's any change in circumstance.
Writing your business plan
The good thing about writing a business plan is that there’s no need to start from scratch. You'll find plenty of resources available online, including templates and guidance notes on how to complete.