What is a Business Plan?
A Business Plan is a document which outlines the targets and strategies for achieving the goals set for your business. Anyone who is serious about succeeding needs a business plan. It not only helps the business owner stay focused on the goals set for the business but it also shows interested parties including credit providers that a strategy has been put in place to give the business the best possible chance of being successful. So, what should be included in a Business Plan? Your Business Plan to stick to this format if possible:
This is like the ‘blurb’ on the back of a book – it gets the reader in and sells the story (or in this case your business). It’s an overview of your whole business and its strategy for succeeding. This usually only contains the highlights, the most important points from the business plan and is good to write after the rest of the business plan has been completed. You should briefly include who you are selling to, your marketing strategy, outline your future plan and ‘vision’ for your business as well your short and long term goals and objectives. You should also briefly outline your projected profit within a set timeframe, your starting budget and how you will obtain this.
This is where you talk about in detail exactly what kind of a business you own. You need to discuss things such as whether you are registered as a business, where your business is located, what kind of an organisation it is and how it works, as well as information about who manages and who owns the business. You also need to go into more detail here about the products and services and the unique features of your business (what sets your business apart). You also need to mention whether you have (or need) insurance, and any other legal considerations.
This is an opportunity to really look closely at the market size and sale trends for your product. You should include any market research you may have done here including surveys or research. Here will discuss your intended customer base (who will be buying your products); how you intend to position yourself in the marketplace, how you will achieve your business goals and targets. You need to consider where your products/services fit in the market and how the pricing compares to competitors. Here you should discuss your pricing strategy and potential for growth of the business here too. It can also be really good do a SWOT analysis here. This is a summary of the strengths, weaknesses, opportunities and threats that exist in relation to your business. Look at the strategies needed to exploit your strengths, protect from your weaknesses, use opportunities presented and counter any threats in the marketplace that might exist. This is also where you put your advertising, promotional and marketing strategy, include the type of media and various methods used to get the word out.
Stating your Vision or Purpose is like saying your vows on your wedding day. It needs to be heartfelt, carefully considered and meaningful. Each word needs to count, and if done well, a well written purpose will allow for growth and change within your business rather than being limiting. Your vision or purpose should describe your idealised model of what your business will look like under ideal conditions. It should also be short (one to two sentences) and easy to remember. The mission statement describes how you will achieve the vision. It is another carefully thought out phrase and it needs to clearly articulate how you will operate and reach your business goals. It should outline the reason for your business, how the business plans to grow and its point of difference. Then you need to list your goals and objectives as well as a step by step action plan to make the end goal more achievable.
This is where you discuss how you plan to make money. Here you need to list the current revenue earned on each product or service offered as well as the sales trend for each of these. Then you need to review your sales as well as making note of who you have been targeting. You can also mention here if any outside factors affect your sales, such as seasonal, (do your products sell better in summer for example?) or other things such as the GFC or changes within your industry which might have an impact on sales. You then need to list your start up costs, a balance sheet forecast, a profit and loss forecast as well as expected cash flow and other financial strategies you might have in place.
Many people starting out don’t think putting together a business plan is important until they get outside investors involved or until they start to become successful. But if you do the above as one of the first steps of launching a business or venture you will have a strong foundation and a clear vision to ensure you business can reach its fullest potential and you can find your spot on that sunny beach sooner.