Businesses at any stage in their life cycle can benefit heavily from creating and implementing a business plan.
Not only is a business plan there to map out your goals and aspirations, but also to identify any financial risks and operational challenges you may encounter. A plan will usually outline strategies to avoid all these issues – that’s why it’s important to create a thorough plan as early as possible in your business journey.
Here are some things you should include and what your business plan can do for you.
Why do you need a business plan
A business plan has several advantages, including helping communicate your business goals, market knowledge, and financial understanding to potential shareholders and investors. Your plan is also instrumental in accessing funding. If you want a lender to take you seriously, you’ll need to prove that you understand how you’ll use their money to grow your business and give them a return on their investment.
It’s not just start-ups that can use a business plan to secure further funding. Existing businesses looking to expand will also be able to use their plan as supportive evidence towards a loan or investment
How long should a business plan be?
Usually, it’s best practice to keep your plan reasonably short. If you’re expecting others to read it, the last thing you should do is present them with a 300-page plan that makes them lose interest before they get to the important details.
What to include in your business plan
Basic business information and research
First, you’ll need to clearly explain your business in the simplest terms possible. This includes what services you’ll offer, who your target market is, and your business structure. You’ll also need to show any market research you’ve carried out on your competition. It’s important to demonstrate that you understand current trends and how to adapt to any market changes that may occur.
Your financial planning will make up a large part of your plan, including cashflow forecasting, an income statement and a balance sheet. It’s also important to include any plans for funding or investment. You should explain how much you need to reach your business milestones and how you’ll use the money to develop your business.
Your marketing strategy will also be an essential element of your business plan, requiring you to consider how you’ll stand out from your competition and determine the most cost-friendly and efficient ways to sell yourself to your target audience.
Management and operations
Any effective business plan should contain information on your management and personnel structure as well as your business operations.
In this section, address the strengths and responsibilities of each team member. By identifying potential weaknesses, you’ll be able to put measures in place to cover those gaps. You should discuss your expected staffing costs and how they might grow over time, as well as how your business would continue to run if you were to lose a key member of the team.
As your business premises are a key part of your operations, they should also be part of your plan. You’ll need to identify the size of your premises to start with, making sure you discuss how you’ll fully utilise the space, how much it will cost and how long it will be viable for
Business equipment, maintenance and general upkeep will factor into your future costs as well as your operational plan. Alongside inventory control, you’ll be able to show others how you plan to meet demand and adapt to both the busiest and slowest trading periods.
Even though the business landscape looks somewhat uncertain right now, a bit of careful planning and confidence can help prospective business owners make their latest venture a success.
Although you might not consider an accountant to be the first port of call for help when building your business plan, a keen financial eye is the most useful tool to have when you’re assessing your business’s position now and in the future. Contact us to discuss the best ways to build and implement a plan, and don’t forget to follow us on LinkedIn for more business and accounting updates.