Drafting out a business plan is crucial for any company in its infancy, but many would-be entrepreneurs see it as a herculean task and try to go to market without one. This is a mistake.
You can’t just talk about your next great idea, you need to put it to paper. A written plan will not only allow you clear vision around growth, but will also enable you to properly determine whether your business will actually be a success before you begin investing your hard earned capital.
Whether to secure capital from an investor or to scale your business up, the first step of drafting a winning plan is having clear objectives for both the document and your business. Usually a plan will encompass the current position, the current and future market conditions and check points for review. If each of these categories are carefully addressed, you will be well on the way to constructing a plan that will either start you on the right foot, or take your business to the next level.
Here are a few tips to keep in mind:
1. Consider your market
The only way you can forecast the potential future of your business is through completely understanding the conditions of the market you wish to enter.
How large is the market? What percentage of the market can you hold?
Who are your competitors and what are they doing? If questions such as these and similar can be answered, an effective and realistic plan can be developed. IBISWorld or EuroMonitor industry reports are great if you can get your hands on them, but if not then look to the national associations related to your industry.
2. Seek assistance
You’re not the first person to write a business plan so don’t reinvent the wheel. A wide range of templates are available online to give you advice around whats needed in a plan. Depending on the nature of your business, a plan may need different information, so find a template that suits and and adapt it your situation. Also, if your plan is being created before you launch, it may be hard to fill out some pieces of information. Seek out industry peers and colleagues to help advise and guide you with points of note and constructive criticism.
3. Do the sums, and do them right
This is a big one. A business plan is to show that a business can eventually be successful, and the key is being able to forecast your revenue, profit and expenses. Nailing down these figures is crucial. Whilst most people have a fuzzy idea of where their income will come from, it is sometimes hard to be shown exactly how many units you need to sell in a week, and what your expenses will be. Being brutally honest with yourself around these figures will hopefully let you avoid nasty surprises down the road.
4. Make everything relevant
It is all well and good having a clear objective for the business, but unless every decision is made with the greater goal in mind, the business will never reach its full potential. Making a plan that provides both broad and encompassing goals as well as a framework for daily activities is important. Create your plan to enable all staff to see the direction you want the business to head in.
5. Always revisit your plan
Remember that a business plan is not a static work. To get the most value from a business plan, it needs to be revisited and reviewed several times a year to ensure that you are hitting your numbers and trending towards success. Each review should assess your existing goals and also set out your updated objectives, as this systematic update and review progress will enable a holistic approach towards building a successful business and will let you know if something has gone wrong recently.
The Final Word.
Developing an honest business plan is such an important component of creating a successful business. Many people think of it like a foundation stone, something that supports the entire structure. Remember, a business plan is there to show you the hard truth behind your idea, so if it shows you that the concept is not viable, be thankful you found this out before investing those life savings.
Now get planning!