Some will say it is only required when you need to raise finance, but in my view if you fail to plan then plan to fail?
Your business plan is your blueprint for success. It is not a document that is only written when requested by a third party like your bank manager. It is not a document you write and placed on a shelf once completed. It should be a live document, capturing your business idea, vision and plans that you should then revisit on a regular basis.
A good business plan will bring together all those ideas buzzing around inside your head in a logical way whilst committing your ideas to paper. In preparation, it will fuel your idea, take you through a thought provoking process and help you identify the areas that you need to consider more carefully.
It is always a good action to look back at your business plan after a couple of months to see if you have implemented your plans and ideas. If not, then review why not.
Your business plan does not have to be a book or essay. It may be as simple as a one page plan, using a tool such as the Business Model Canvas that I ue with my clients. Much depends on the stage of your business and if any purpose beyond your own planning.
The level of detail in your business plan will depend on the nature and size of your business plus the time and effort you are willing to put into its preparation. The most effective business plans make it clear what the business will focus on, identifies the financial implications of the business and helps overcome problems before they arise.
Remember to be realistic rather than optimistic when making assumptions, particularly financial projections. When you make such assumptions, remember to make a note of these so you recall at a later date how you had forecasted such information.
The review of your business plan is a critical stage. Are you achieving the financial forecasts that you set yourself? Does your product or service look like you initially visualised or have you forgotten a key element? This review enables you to be aware and take action. A good, well considered plan is one of the cornerstones of a successful business.
One key element of effective business planning is to seek a third party opinion. This should not be a friend or family member, as they always see the good and will not always be prepared to challenge an area they should.
In preparation, always start by making a note of your initial thoughts on paper. Then pull all the information together covering the following key areas as an effective structure:
- Business summary including your key points, aims, objectives, motivation
- Business description
- Products & services including what you are offering and why customers will buy from you
- Your key people summary
- Market analysis
- The Marketing & sales strategy
- Management plan
- Financial data including the financing plan
- Other key partners, processes or activities (ie IT, Premises, Legal, Supply chain….)
As mentioned, I suggest that you prepare your plan and review this on a regular basis as a live working document.