The importance of having a plan in writing
By Dean Williams (Print-Print.co.uk)
Where do you start?
So, you have a business idea and you’ve done some market research to check there is a market. You’re getting ready to open business accounts, thinking about premises and cash flow. Then someone asks to see your business plan.
What? You don’t have one? It’s all in your head? Even if you don’t plan to raise capital from a bank or investor, putting everything together in a recognised format makes sense. Even the best memory is less reliable than the worst handwriting when it comes to remembering every detail.
Don’t be afraid
Many new small business owners are afraid of business planning, because they see it as somehow constraining the business, committing them to a single strategy, or defining what constitutes success or failure. If that’s you, put those ideas aside. A business plan is a living document, which can and should be updated regularly to reflect real events. It’s not set in stone and if you don’t meet targets, that’s not necessarily failure, just slower success than you hoped for.
If you’re putting a plan together to raise money, you might need to use more technical language and a few fancy graphs. If it’s a real plan for your personal use, it may not look as polished, but it will be far more valuable to your business in the long run – provided you follow it and adapt it.
Business plan anatomy
Give your business plan a cover, title page and table of contents and three main headings or chapters. These are the business, market and financial sections of the plan.
The business section of the plan is where you consider your business from the industry side. It consists of an Executive Summary, company description and product or service description. Although the executive summary comes first, it helps to write this last, once you have all the details in place, as it’s really just highlighted excerpts for people who don’t want to read the entire plan.
The company description should give the legal set up of the business, names and background of key staff, and start up plans. This is where you detail the premises you need, plant and machinery you will employ, and determine the size of your workforce.
The product or service section should describe what you are selling, focusing on the benefits to customers rather than the product features. Avoid jargon. You want someone with no industry experience to be able to read this and know what you do.
In this section, you will look at your customer avatar, identifying your target market and demographics. Look at buying habits and patterns. You’ll also look at the problems that your business could encounter and plan to overcome them, at your competition’s strengths and weaknesses, and at your distribution and marketing channels.
Once you’ve done a thorough market analysis, you will look at strategy and implementation. This is where you set deadlines and targets, remembering they’re something to work towards. Describe how you will track and measure performance.
You might also include an operations and management plan, outlining your working procedures. If you didn’t include management or key staff details in the business section, you might include them here instead. Also, for an online business, you might have a section dedicated to your online strategy for web site development and maintenance.
The financial section of the business plan is where you put your cash flow charts, income and expenditure, profit and loss, balance sheets and break-even analysis.
Don’t worry about the length of your plan. It should be as long as it needs to be to include all the information you want to keep track of. After all, it’s your plan.