Putting Together a Business Plan
A business plan is vital to the survival of your business — regardless of whether it is new or established.
What is a Business Plan?
In it’s most basic form, a business plan is simply a detailed summary of what it is your business does. Things like your management, staff, marketing, finances and info about your potential customers are all included along with your strategies and possible outcomes for each. It is a great way to identify the strengths and weaknesses of your business, the possible outcomes for success and the key factors you will need to address in order for it to be a success.
Why do a Business Plan?
There is an old adage — “by failing to prepare, you are preparing to fail.” One of the reasons why so many businesses fail, is because they don’t have a business plan. In some cases, a business plan would have shown the intended business was not viable in the first place and in all cases, a business plan provides a great resource for monitoring the growth and performance of the business once it is up and running.
A business plan lets you play devil’s advocate and run through negative as well as positive scenarios. You will be able to identify the key areas that may otherwise have been overlooked and anything else that may have been overlooked. Even if your business plan shows the business is not viable, you will be able to see exactly why and make any changes or consider a different business concept.
Perhaps one of the most important aspects of having a business plan concerns financing. If you approach a lender with a detailed outline of your business, its strengths and weaknesses, and why you require the funding, you are well on the way to securing those funds. Your business plan will also serve as a complete proposal, acceptable to the most stringent lenders.
If you aren’t yet convinced about the need for a business plan, consider this. “Statistics show that the top 25% of successful businesses are twice as likely to have a business plan in place.”*
* Source: Australian Society of Certified Practising Accountants, 1999
Just as in everything else in life we keep score, a business plan will help you do this and to remind you of the areas you need to focus on that are vital to your success.
How do I write a Business Plan?
There are a number of great resources, including business.gov.au, which provides templates. Preparation of the business plan is the most important task for you and the manner by which you go about it will determine and test your commitment and motivation to the business in the first place.
Your business plan should include detailed information on the following:
- your industry
- your product or service
- the way you intend to market your product or service
- the production process
- personnel — both now and future projections
- financial details including expenses, projected costs, etc
- management strategies
- business development strategies
- the main reason the business exists
- the location and detailed information about the area
- the structure of the business
- any perceived strengths, i.e no competition
- any perceived weaknesses, i.e very competitive market
- any untapped opportunities for the business
- any threats to the business including climate, seasonal nature
- resume of the key people running the business
The best part is a business plan is a never ending concept. As your business grows or when any major event occurs, it is an opportunity to go back and re-evaluate. Some things may have changed such as the location, number of employees or your plans for expansion and all of these things will have an impact on your business. Will you be ready?