Business Plan: Writing Tips for your Business Success
A business plan is not just a means to getting funding – it’s a necessity to make your business work. Business plans set out your business goals, strengths and weaknesses, and map out a viable plan for the future. Find out why business plans are so important, plus how to write the perfect business plan to get your company noticed.
How to Write a Business Plan
Less than half of all small businesses have a concrete business plan, and even fewer stick to their goals. Yet a business plan is not just for show. To get anywhere in business, you need to know where you’re going – and then set out manageable steps to make it happen.
What is a Business Plan: Why Write a Business Plan?
But why exactly is having a business plan so crucial, what should every business plan include, and how can you make your business plan stand out from the pack? Read on to find out.
How to Write a Business Plan: Why You Need a Business Plan
• Studies show that companies with business plans are far more likely to succeed in the all-important start-up phases.
• If you’re just starting out in business, it’s important to make sure your product is really viable, fills a gap in the market and will make you money. It may be disappointing to find out that your great idea won’t work in the real world, but it’s far better to discover this at the outset than risking all of your time and savings on a failed opportunity.
• It will help you manage your business more efficiently and give you the opportunity to analyse your business, helping you spot problems as soon as they come up.
• Having a plan lets everyone know where you’re headed and what your common business aims are, encouraging teamwork and focus.
• To gain funding. Your business will only be considered by potential investors and bank managers if you have an up to date and comprehensive business plan to show how you plan to grow in the future. If your business plan is not compelling enough, they won’t part with their cash.
• With your growth plans mapped out, you’ll be able to pinpoint whether your forecasted growth requires new assets or justifies extra expenses, such as renting premises. You’ll also be able to tell if you need more employees, and whether you will be able to pay them.
• A promising business plan will also make your business stand out to clients, contacts and business alliances.
• A business plan forces you to set out what your main goals and projects will be in each particular time frame, so you’ll know exactly what you need to focus on and won’t waste time dealing with things that don’t really matter.
• With goals and time-frames mapped out, you will know exactly what you’re working towards and are more likely to reach your major long-term goals when you’re easily achieving them in bite-sized chunks. In other words, having a business plan increases your chances of long term success.
• A business plan helps you decide on a course of action to achieve your goals – that way you can check if you’re on track by whether you’re reaching the targets you’ve set yourself.
• To help you keep track of your cashflow. Cashflow mismanagement is the most common reason small businesses fail. “You can have a hugely successful business but if you run out of cash it’s game over,” explains ex-Dragon’s Den TV entrepreneur Rachel Elnaugh. But with a carefully structured business plan, you can organise when your money will be going out and coming in by forecasting sales and costs, and plan for emergencies when you may need some extra cash to help with seasonal expenses or lulls in sales.
• When it comes to liquidating or selling your business, you’ll have an exit plan in place – and your business plan will be hugely important to potential buyers. It will also establish how much your business is worth.
How to Write a Business Plan: What Your Business Plan Should Include
Every business plan is different, but they should all have the same basic structure, and should be written clearly using simple, concise language – but should include all relevant details and figures to back up your plans. Here’s everything you should discuss in your business plan.
• The Executive Summary: This is a summary of what your business is actually about and plans to achieve. It’s often best to write this after you have completed all the other sections as you will have a clearer idea of where you are headed and what your objectives are. Here you should emphasise what your business has to offer and how it is different, as well as what your targets are.
• The Business Opportunity: This refers to what you are selling, and to whom. This is where you explain what gap in the market you will be filling, or how you’ll provide a service much better than any that are already available. It’s helpful to discuss your competition, how your business will grow and possible obstacles you may face. It’s also important to show how what you are selling will service a need your customers have, and what potential your product could have on the market.
• Your Strategic Marketing Plan: Here you explain how you will sell your business or product, and why people will want to buy it. Be specific about what your strategies will be for making, selling and getting your products on the market. You also need a plan for how you’re going to advertise your products to consumers.
• Your Business Team: Here you will explain why you have what it takes to run the business, as well as listing the skills of your employees – plus information about jobs you plan to recruit people for in the future.
• Financial Forecasts. Here you set out exactly how much your business will cost at each stage of growth, how much you expect to make and what you predict your turnover will be in the coming years. Include timescales, costs, recourses, outputs, returns and margins. Importantly, include how your business will be funded, what you will use the money for and how long it will take for your business to start making money.
• Your Recommendations. This is a practical explanation of where you will run your business from, what recourses and assets you will need and how your IT systems will work. Basically, this is where you prove you’ve planned exactly what you need to do to make your business happen.
How to Write a Business Plan: Tips to Make Your Business Plan Stand Out From the Pack
• Don’t try to make your plan too verbose – rather use simple, understandable language that gets your point across. If you’re using your plan for a reason other than just to help your business, for example looking for funding, then tailor it to whoever you are showing it to – the focus should be on explaining clearly how your business will help them!
• Be flexible. If writing your business plan helps you discover problems with your product or planning, all the better.
• If you’re presenting your business plan to potential investors, make it crystal clear how – and when – they can expect you to start making profit so they can get their money’s worth.
• Include all the important details, but don’t ramble on. As a general rule, a business plan should be between ten and twenty pages long.
• Take advantage of the help offered to small businesses. Several banks offer free advisory services. Or try showing it to an honest friend who can pick up on any holes in your argument.
• Adapt your plan as circumstances change. If something isn’t working, change it!
• Don’t just say you don’t have any competitors – do real research so you know exactly what products are on the market, and then explain exactly why what you have is better.
• The numbers are especially important. Make sure they are correct.
• Make sure your executive summary grabs attention and keeps the reader interested – remember that as it’s the introduction, if it’s not gripping the reader may not even get to the other information.
• Include a clear conclusion at the end to drive home the key points.
No comments:
Post a Comment