What is a business plan?
Ah so you are thinking of starting a business, gone to your bank for a loan or read some information online or from your businesslink advisor and they said that you will need to develop a business plan before you even can get the next meeting.
This is good advice and although you may have all the information in your head you'll need to put all of it down on paper so others can understand your intentions.
Why do you need such a plan ?
Apart from helping others understand just how your are going to make your profit figures over the first few years of your new business is will act as a roadmap for yourself. Once you start trading it is often difficult to remember your initial aims and you can sometimes go off course so referring back to it from time to time is good practice and is used in large corporations for budget purposes and re-planning their financial forecasts.
For Banks and the Success of Your Business
It may seem laborious as an exercise but it is not only essential but critical for your success. No lender will provide you with any funding without it and much research has shown that business plans improve success rates for new business start-ups but also creates more revenues and profits. Here's some of the reasons to have a plan :
- A bank will not lend without one
- More businesses succeed longer term when they have a robust plan
- You can't set objectives without knowing your longer term goals
- You can't set a target without knowing how much improvement you need to undertake
As a business you can not do everything and you will need to prioritise what you will be able to do with finite resources and this will be contained in your tactical plans.
What are the Objectives for a Plan ?
Overall your business or marketing plan must answer four basic questions. Although banks are likely to be looking at finances and assess the risk of lending, these question pertain to your business objectives and longer term outlook :
- You must analyse where you are today
- Understand how you got to the position your are in today
- Outline where you want your business to be in 1 and 3 years time
- Prioritise your actions plans to show exactly how you are going to get there
The Main Sections in Your Plan
For most new businesses a plan will not be longer than around 20 pages in length. This will cover the questions above and include the main sections below (for a more detailed look see our free pdf download which has more information.
- An executive summary
- Economic trends
- Market trends and research
- Your products and services
- Strengths and weaknesses
- Opporunities and threats
- Competitor analysis
- Key management team
- Sales and marketing plan
- Tactical plans
- Financial summary
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