5 minute read
BUSINESS
Importance of the Business Plan
DALLAS SHERRINGHAM
WE all are familiar with the term “business plan”, but what is a good business plan and how do you write one?
I remember my fi rst attempt at a young age: ‘start the business, sell x amount of products every week, make a million!’ I guess I left out a few important things like how and where the finance is coming from, who is doing what, where the products are coming from, how I would deliver them, what tax I would pay….well, you get the picture.
It wasn’t a business plan at all, but rather a mission statement. And I had done economics at high school, but they never taught us about business plans.
Business plans don’t guarantee success, as much as a cricket bat doesn’t guarantee you’ll be the next David Warner, but you have to have a good one to get started.
So, here we go. I learnt all this from the Federal Government business site:
Getting Started on a Plan
Before writing your business plan, it is recommended that you honestly evaluate yourself and decide if your business idea has a good chance of success.
And be realistic, because honesty here can save you a fortune and years of disappointment. Analysis can help you anticipate any challenges you may face and help you overcome them. It can also help you set the goals for your business in your business plan.
Things to consider before writing your Business Plan: • Analyse your business idea – Is your business idea viable? Is there a market for your proposed product or service? Is your business idea worth investing your time and money into? • Analyse yourself – Are you ready to venture into business? Do you have what it takes to be an entre-
preneur? Do you have the skills needed to run your business successfully? Are you ready to put in the hard work?
I would add in here to analyse the opposition, success and failures. It’s easy to read why a business succeeded but less so when a business failed. Find people who know more about the fi eld than you do.
And you can never do too much internet research: Knowledge is Power!
Preparing Yourself For Business 1. Determine who your plan is for
Does your business plan have more than one purpose? Will you use it internally, or will you involve external parties, such as an investor or bank?
Deciding what your purpose is, can help you develop your Plan for the right audience. If the Plan has been developed for third parties, you will need to determine what they will be most interested in. Do not assume they are just interested in the fi nancial part of your business. They will be looking at the whole package.
2. Do your research
You will need to make quite a few decisions about your business including its structure, marketing strategies and fi nances before you can complete your plan. Research can help you develop goals and targets, as well as a better understanding of where your business should be heading.
It is important to make sure your research is up-to-date and accurate before presenting to lenders or investors as market conditions can change over time.
3. Update your finances
Lenders and investors need to know your fi nances are in order and your business is in a strong fi nancial position. Both lenders and investors will want to know how much money you currently have, how much money you need and how much you expect to make in the near future.
While a bit of extra funding will help you ensure you are covered for unexpected costs, be realistic and avoid asking for more than you need. Pay off credit card debt.
4. Write your summary last
Summarise the main points of your business plan using as few words as possible. You want to get to the point but not overlook important facts. This is also your opportunity to sell yourself, but do not overdo it. The summary should include details about your business, market, goals, current fi nancial position, how much fi nance you are seeking and what it will achieve.
5. Get help
Do not leave your business plan to the last minute. It takes time, research and careful preparation to develop an impressive Plan that can sway investors and lenders.
If you are not confi dent in completing the Plan yourself, you can enlist the help of a professional to look through your Plan and provide advice.
There are a number of government and business group services available to help you plan, start or grow your business. These services can provide general advice, workshops, seminars and networking events and can even match you with a mentor or business coach.
Consider talking to a business adviser to help you through your process.
6. Review regularly
Review your Plan regularly. As your business changes many of the strategies in your plan will need to change to ensure your business is still heading in the right direction. Having your Plan up to date can keep you focused on where you are heading.
It is a good idea to keep a record of each version of your Business Plan as they may contain some important historical information as well as your intellectual property.
7. Protect your plan
Having an understanding with third parties when distributing a Plan could be enough protection for some businesses. However, others who have innovative business practices or products or services may wish for each person to sign a confi dentiality agreement to protect their innovations.
It may also be a good idea to include some words in your Plan asking the reader not to disclose the details of your plan.
Business Plan template
The Government’s supplied business plan template and guide provides a roadmap for your business’s future. It can help you start your business and manage your future goals.