Business Plan is a major part in your business success. It’s the road map you decide to take to build a successful Business. Whether you’re an established or start-up business, it’s important to have a plan to help you achieve your goals.
A business plan outlines your strategy for the next couple of years. It can be used to support application for business finance or it could be just for your own use as a roadmap for the growth of your business.
It explains your objectives and the actions required to get your small business from where it is now, to where you want it to be. writing your business plan will help you focus on your ideas, priorities your steps and saves you both time and effort.
# ORGANIZE YOUR BUSINESS PLAN CONTENT
Keep your plan as short as possible, focus on the important information, keep it simple and straightforward.
Be realistic
Keep your plan realistic. unrealistic sales forecasts could lead to increased overheads which may affect your cash flow. It may also affect your credibility, because lenders and other interested parties will quickly see through optimistic plans that ignore weaknesses or threats.
Be professional
Even if your plan is for internal use only, put a cover on the plan and include a contents page, with page and section numbering. Write an executive summary of the key points and aim of the plan. Check your spelling and grammar mistakes.
# EXPLAIN YOUR BUSINESS AND PRODUCTS
Start with a brief summary of the business. When did it start and what progress has it made to date? Who owned the business originally? What is the current ownership structure? Describe your products and services, what makes your product or service different? What advantages of your products or services? How do you plan to develop the business?
# YOUR MARKET AND COMPETITION
Define your business market, customers and other competitor’s businesses.
Your market
Define current market in which you sell and then focus on the competition. How large is your market? What is your market share? What are the important changes you may expect? What are your plans do overcome the unexpected changes in the market?
Your customers
Understand your customer’s nature and expectations. Study what type of customers you are looking to target. Asks for feedbacks to measure your success and adjust any errors.
Your competitors
Define your principal competition. Compare their products and services against yours? Cover issues such as price, quality and distribution. Then explain why customers will buy your product or service instead (your competitive advantage). Be careful of criticising or underestimating competitors.
# MARKETING AND SALES PLANS
Define your proposed marketing and sales activities and include:
Positioning
Explain how your product or service are positioned in the market place. Such as:
• High quality and high price?
• Good value and durable?
• A specialist product with a particular feature
Define your unique selling features and concentrate on it.
Pricing policy
Pricing policy is important. Explain how price sensitive your products or services are. Identify where you make your profits and where there is a chance to increase margins or sales. Explain how you set your pricing accordingly.
Promotion
How do you promote your product or service? Each market segment will have one or two optimum methods, for example, direct marketing, advertising or PR. If you’re considering using a new promotion method, start on a small scale to test if it works.
Distribution channels
What channels do you use or plan to use, to reach your end user? Compare your current channels with the alternatives and note the distribution channels used by your competitors. If they are using some channels, such as the internet, more effectively than your business, outline any plans you may have to match them.
Sales methods
Analyse the cost efficiency of each of your selling methods, for example, telesales, a direct sales force, through an agent, or over the internet. If you have a direct sales force, include all the hidden costs, such as management time.
# MANAGEMENT AND PERSONNEL
Identifying skills and structure needed for your staff such as IT skills, and plan how to cover these. Explain your recruitment and training plan, including time scales and costs. Analyse your workforce in terms of total numbers and by department. Be realistic about the commitment and motivation of the workforce. Consider how you would survive the loss of a key worker.
# YOUR BUSINESS OPERATIONS
Analyse the capacity and efficiency of your operations and your planned improvements. Do you own or leasing the premises? What are the advantages and disadvantages of the present location? Should the business expand or move?
Information systems
Explain the management information systems you have in place, such as databases, networks, servers, and accounting reports and processes. How reliable are your systems and can they cope with any expansion? identify any quality or regulatory standards that the business must comply including environmental standards.
# FINANCIAL PERFORMANCE
Financial forecasts
Set some goals and provide forecasts for the next three years. These should reflect the complexity of your business. A small business may need only a profit and loss statement, and sales and cash flow statements. A more complex business will need balance sheet forecasts. Clearly explain the assumptions behind your forecasts. if your plan states that the market is becoming more competitive, then profit margins will probably be falling. Check the historical forecasts and numbers. Are they believable? Do the forecasts created more issues for your business such as cash low shortage?
# SWOT ANALYSIS
This is about Strengths, Weaknesses, Opportunities and Threats in your business plan, for example:
• Strengths might include brand name, quality of product, or management.
• Weaknesses might be lack of finance or dependency on a few customers.
• Opportunities might be increasing demand or a competitor going bust.
• Threats might be a downturn in the economy or a new competitor.
Be honest about your weaknesses and the threats you face. Spell out mitigating circumstances and the actions you’re taking.
# YOUR BUSINESS FUTURE
Make sure your business plan covers the critical issues that will make readers understand how you intend to achieve your small business success. Highlight the key factors of your future success and how you will strengthen your position in the market. Next step is to establish your business aims – where you will be in three years’ time. Set your objectives which will make a significant difference to the future of your business.
Set up timelines for your objectives so that you know exactly what you want to achieve and by when.
You may think of
• Income – more sales, better margins.
• Customers – new customers, higher levels of customer satisfaction.
• Products – improving products or launching new ones.
• Human resources – recruiting new employees, developing new skills.
# UPDATING THE PLAN
Finally, be sure that economies, markets and your business itself keep changing. This means you need to review your plan at least once a year. Check How well have you done? Have you met the benchmarks in the plan? Revising and updating your plan means that you are driving your business to success.
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