How to Write a Business Plan
Writing, and following, a good business plan is essential to running a great business that expands into the future and makes the business more attractive to investors and lenders.
What is a business plan?
A business plan is basically a roadmap for where you want your business to go. It includes why it is moving in that direction, the exact steps that you are laying out to get there, what resources you will need to get there, and what you will have at the end. Finally, the plan should have a time frame set against it that is realistic.
These points may seem a little tough to get down on paper, but remember that the time spent working this out now may save you incredible pain later on.
And remember, however good your business plan is now, you, as the business owner or director, can adjust this plan as you go. Depending on the size of your business, and the roles of other stakeholders that review may need to be approved or at least discussed with others, but the main point here is that a business plan written five years ago may need to be revised today to stay relevant.
A business plan should be part of every small business, ongoing enterprise, or large business in Australia.
How do you go about writing a Business Plan?
You may be starting a new business, needing to secure finance, or resetting the direction of the business. Here are a few steps that I think you should look at in writing your business plan;
1/ Research and understand the field you are moving in to. Get yourself as up to date as possible with whatever trends or new technologies exist in the field. Talk to peers and consult websites, periodicals and books. Do this thoroughly, and don’t assume that just because it is a field that you studied in University, or have been working in for years that you can skip this step.
2/ Start at the big picture and work your way down. What is your end goal? What are you aiming to achieve? Is it to ‘provide the best … in Australia’, or to ‘Be a world leader in …’, or perhaps ‘to make enough money to provide for my extended family’. You can see that I am talking about the really big picture here. Look at something better than ‘to make a lot of money’, or ‘to be happy’. There is likely more to it. If not try to look at what makes you happy, what will make you get out of bed in the morning?
3/ Consult with other people, family, employees, other people in the industry, but be true to your own goals.
4/ Think about financing. The financial plan is where a lot of business plans fall down. You are, at some point of the expansion, likely to need outside funds. This may be investors, lenders or other equity. The business has to be attractive to a lender, and it is going to have to clearly be in a position to make money, either to give confidence that a loan will be able to be repaid, or investment will make a return. Also, think about what your business will have in terms of assets that might help in its attractiveness to finance.
5/ Set goals and plan out each area of your business – manufacture or creation of your products or services, sales, creating new business in your target market, marketing, finance and governance. These are all important aspects, and none can be forgotten. Make sure each area of the business has plenty of information – this is important because each employee will need to know how their role fits in, a banker will need to know how the financials are being dealt with, and so on. Each potential player in the business plan will have a different need or purpose within the plan, and so you will need to address all of it clearly.
6/ Separate out long term and short term targets, with clearly defined steps for each, and clear time frames.
7/ Make sure each of the various parts of the business plan meshes with one another. Keep working it over until it does all fit together. Does the marketing plan create enough want for the sales team to sell to? Is the delivery line able to keep up with the sales? Is there enough knowledge and experience in management, and is there a plan to keep skills and knowledge updated?
8/ Don’t be afraid to find that your business was one great idea and was kept going thus far by your own enthusiasm. A good business plan does consist of finding all the gaping holes in your business and filling those in, as well as finding the killer ideas and uniquenesses of your business and strengthening those.
Make your business plan through. Get the help of a professional (there are people out there who specialise in helping to formulate your business plan, or can provide you with a business plan template), use it frequently and encourage the stakeholders to apply their own sections frequently. Update it as you see fit with good foresight and don’t forget to let others know if an update effects them
Got any questions? Ask me on twitter (@AndBrokers)