Writing a business plan
If you’re thinking of starting a new business from a realistic idea into a product or service, then you should firstly begin with a business plan. This is basically a written summary of your business which details your goals and how you are planning to achieve them. Although writing a plan can be a time consuming process, if you don’t have a business plan, you’re likely to fail. A plan forces you to review everything about your business from value proposition to the external environment thus giving you a clearer direction. Here we show what type of information is needed in a business plan.
The first thing to do when writing up a plan is to write a brief summary about your business, what is your product? What services do you offer? This should give investors a clear idea of what your business is about and what you’re selling.
The background section should also include an executive summary of the organisation such as the legal structure, the type of business and location. All these points show how the business is going to function - the purpose is to give an overview.
What are your objectives?
The next stage is to identify your objectives. Where are you going to take your business? What are you trying to achieve?
A framework that is particularly useful for writing up your objectives is SMART.
SMART goals should be:
• Specific - you need clear objectives so you know what you need to achieve.
• Measurable - objectives should be measurable so you can judge your performance. For example, to increase market share by 5% in value.
• Appropriate - Is the objective achievable?
• Realistic - you should review all your resources to ensure that the objective you set is realistic and not overly ambitious.
• Time bound - How long will it take to achieve your goal?
Once goals are identified, you need to bear in mind how you’re going to achieve this through your strategies.
When writing up a business plan, some form of market analysis such as who your consumers are and a SWOT analysis (strengths, weaknesses, opportunities and threats) are required. This shows investors how you have defined your target market and your plans for catering to this specific audience.
A SWOT analysis specifically evaluates the organisation’s internal strengths and weaknesses and their external threats and opportunities. This can help you identify and understand the key issues that can affect your business.
The identification of your direct and indirect competitors is also vital. If there are several competitors in the market, then you would need a few sentences that state how you’re going to gain advantage over your competition.
Operations and management plan
This section should describe how the business functions on a continuing basis. The operations part should highlight the logistics of the business such as the various responsibilities of the business and the expense requirements related to the operation of the business.
Lastly are the financial forecasts and plans, this should include:
• The amount required to start and to maintain the business
• Plans to how the funds will be utilised
• A forecast of ongoing financial figures
At the end of the plan you should include a balance sheet along with any other supporting documents that are relevant to providing an overall picture of the organisation. Once these stages are written out then you can revisit your plan further down the line to remind yourself of the targets you’ve set and implement changes to the goals and strategies as necessary.
Although this article details these simple steps to writing up a business plan, there are other ways in which this can be structured. Nonetheless, having a sound business plan demonstrates your vision, awareness and ambition for your business.