Business Planning for Success is the Second Part of the Business Planning Series of Articles
The importance of writing a business plan can often be frequently overlooked, and many business owners only write a business plan when seeking finance and then often by the request of the financier. A business plan is not just a document for banks to read. A well-written business plan is a roadmap for your business success.
To have a good business plan you need to plan your plan, yes you read correct plan your plan.
To put your business idea on paper, you must thoroughly consider and research the numerous variables your business might encounter.
The best way is by using SWOT analysis as covered in our article What Business to Start Part 2 With your ideas arranged and listed on paper, break these into;
Strengths: List your strengths and how these will give your business an advantage.
Weaknesses: List these and how they can affect your business be honest.
Opportunities: List out the opportunities you think are available to tap into you will be surprised at the different opportunities that are out there.
Threats: List out your known threats such as government policy changes and your competition, List unknown threats, this may take a bit of thought, it could be you are in an earthquake zone. How will you deal with these threats and what impact will they have on your business long term.
Now you have completed your SWOT you will need to use this information as a basis and reference to create your plan.
The Business Plan
A good business plan depending on the type of business should include
Four Key’s to a Successful Plan
Note: Always start your document with a table of contents listing the heading for each subject.
1. Executive Summary
Your executive summary; provides an overview of your business, your key objectives, ownership, management structure. What product or service you are offering, your target market, competitive advantages, marketing strategy, and a summary of your financial projections.
If you require finance, include your current banking information and details of any current and potential investors.
If you are planning to expand the business, include a brief on this explaining the how, what and why.
If you are just starting a business, maybe you won’t have very much background information. You will have experience, focus on that and include the reasons why you decided to start this particular business.
Note: Its best to write your executive summary last, as each paragraph is a summary of the more detailed, related sections in the plan.
2. Business Profile
A business profile begins with a short description of your businesses industry. Write about the current status of that industry and future possibilities. Provide information about all the market segments within that industry, include any new products or developments that could benefit or affect your business.
It is important to have a Mission Statement. A Mission Statement explains what your business is about, when it commenced and who are the key personnel. Try, and have at least 3-4 sentences as a minimum explaining what is the vision and mission of the business, capturing;
1) Key market: Your target business, who are your client’s or customer?
2) Contribution: What does your business provide your clients or customers and what product or service do you provide?
3) Distinction: What makes your business and product or service unique, so that a potential client or customer would choose you?
he products or services you provide.
3. Marketing Strategy
Demonstrate that you have understood your market. A convincing marketing plan shows the reader that you can succeed in your target market; you have researched, and you know and understand your market.
You should be able to demonstrate this from what you captured in Opportunities of your SWOT analysis.
From your Opportunities list, you will need to research and expand to illustrate your industry and market knowledge. Include any findings and conclusions from your research such as are there gaps in your target market, then demonstrate how you can fill these gaps.
How do you plan to promote your product or service?
How will you structure your pricing?
How will your products or services be sold i.e. online, store, wholesale.
Provide a plan of how you will advertise and get your product or service known. Maybe you will use social media i.e. Facebook, Twitter, or tradeshows, printed media, or online advertising or another source. You will need to include the cost of each advertising type.
4. Financial plan
The Financial Plan is the most important part of a business plan; you will need to set aside time for this and give it your full attention.
A financial plan includes; projected financial statements, income statements, monthly cash flow, and annual cash flow. You need to have all of these projected for years 1,2 &3 and sometimes out to five years of your planned business operation.
The first year is always broken down into monthly projections for at least the first six months then quarterly projections. Year two quarterly then yearly projections through to years three, or five if you choose.
Include all of your data you used in forecasting your revenues and expenses.
Note: Include graphs if you can, a good colourful graph explains everything.
The last thing to include while not one of the key subjects it gives the reader access to research and background information supporting your plan. The Appendix does not necessarily included in the main body of your business plan. Some of the background information, you may want to keep confidential and only provide to those you feel they need see. Those such as potential creditors may require this information to assist them deciding to fund your venture or not.
It is not unusual to have two or three versions of your plan with or without the appendix and or an abbreviated appendix.
A good appendix includes:
Pictures and description of your products
Letters of reference
Tip: Always keep a record of who you have given a copy or copies of your business plan. As you update your business plan, you can issue an update to those on your record list if you feel necessary.
Tip: Make your Business Plan stand out, include photos, graphs and have a standout cover page with a logo or product or service photo.
Business Planning for Success is the second in a series of articles on Business Planning, the next article Build a Marketing Plan, will discuss how to prepare a detailed Marketing Plan for the Small Business.
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About Darren Wilkins
Darren is a semi-retired senior executive and serial entrepreneur who runs a number, of successful businesses both online and offline.
With 30+ years experience in management and as a management consultant Darren has a can-do attitude and offers real practical advice that can be used for any business no matter the size, Darren is using his time focusing on online opportunities and building better businesses.
With global experience managing and directing multimillion-dollar mega construction projects and businesses. Darren has a wealth of practical experience to share and wants to help you and your business.