Every business needs to write an annual Business Plan. This enables the management to plan ahead rather than exist on a “hand to mouth” basis. In addition, it enables management to plan for loss of business, changing direction or gaining new business.
What is a Business Plan?
In simple terms –
-Who
-What
-Why
-Where
-When
The primary value of your business plan is the writing of an outline which evaluates all aspects of the “economic viability” of your business including a description and analysis of your business prospects.
Irrespective of the size of your business, it is an essential step for you to carry out this exercise every year.
When preparing your business plan you only need to look 2-3 years into the future.
Business Plan Format
This will comprise:-
“A vision statement” – which is a concise outline of your business purpose and goals#
“The people” – your team with a potted history of each key player
“Your business profile” – define and describe your intended business and how you plan to go about it
“Economic Assessment” – give a complete assessment of the economic environment in which your business is a part. If appropriate, provide statistics from government department.
“Cash flow assessment” – include a one year (monthly) cash flow that will incorporate your capital requirements. Include your assessment of what could go wrong and how you would deal with problems.
“Budget & Target Projections” – to create your Cash Flow projections, you will have needed to prepare a Budget. At the same time prepare a set of targets and see what impact they have on your cash flow.
“Marketing plan” – How will you market your products and to whom, and why. Show you understand the market.
Key Factors
-A healthy growing and stable industry
-Capable management
-Able financial control
-A sound business concept (Vital)
-An understanding of your market
-Consistent business focus
-Can your business be online (i.e website etc)
Steps to a great business plan
- Basic business concept
- Feasibility and specific
- Focus and refine your concept
- Outline the specifics of your business
- Review sample plans for ideas
- Layout your plan in a compelling form
Do’s
- Prepare a complete business plan for any business you are considering
- Use the business plan template available online
- Complete sections of your business plan as you proceed
- Research (use search engines) to find business plans that are available on the internet
- Package your business plan in an attractive kit as a selling tool
- Submit your business plan to experts in your intended business for their advice
- Spell out your strategies on how you intend to handle adversities
- Spell out the strengths and weaknesses of your management team
- Include a monthly one-year cash flow projection
- Freely and frequently modify your business plan to account for changing conditions.
Dont’s
- Don’t be optimistic (on the high side) in estimating future sales
- Don’t be optimistic (on the low side) in estimating future costs
- Don’t disregard or discount weaknesses in your plan. Spell out.
- Don’t stress long-term projections. Better to focus on projections for your first year.
- Don’t depend entirely on the uniqueness of your business or the success of an invention.
- Do not project yourself as someone you’re not. Be brutally realistic
- Do not be everything to everybody. Highly focused specialists usually do best.
- Don’t proceed without adequate financial and accounting know-how
- Don’t base your business plan on a wonderful concept. Test it first.
- Never, never skip the step of preparing a business plan before starting.
