The Business Plan

Five step......

Successful entrepreneurs are obsessive about setting goals and working methodically to achieve them. Your business plan is your opportunity to record your vision, plus the practical steps that will make it a reality.

  • Step 1: Dream it
  • Step 2: Design it
  • Step 3: Test it
  • Step 4: Redesign it
  • Step 5: Put it to work

 

It’s amazing how many business owners get by without a plan. While it’s certainly possible to start and run a successful business without a written business plan, you’re doing yourself no favors.

For a startup, a business plan is an essential pre-requisite when you’re applying for business finance. But that doesn’t mean it’s something you write once for your loan application then leave gathering dust. A well-written plan is a tool you can return to again and again.

The good news is that it doesn’t have to be a telephone book. In fact, as long as you’ve covered the essentials, then the shorter the better.  Clubwww1 shows you 5 steps begin your plan. 

Step 1: Dream it

Start by setting out your strategic vision for your business. Where do you want your business to end up? Everything you’d want to tell a potential investor, partner, employee or customer should be here, including:

  • Your vision. While it only needs to be a sentence long, your vision statement may be one of the hardest things you’ll ever write. It’s important to get it right — brief and aspirational, yet achievable.
  • Your unique selling proposition. This is your competitive edge, the unique quality that keeps customers coming to you instead of a competitor.
  • Your target market. Rather than trying to be all things to all people, you can increase your chances of success by targeting a well-defined niche.
  • Your products and services. Once you know your niche and unique selling proposition, you can design your portfolio of products and services.
  • Your goals. Key goals for the period covered by the plan. Make them measurable, achievable and consistent with the financial plan.
  • Capital requirements. If you’re using your plan to apply for a loan, state how much you need and what it’s going to be used for. Your figures should be supported by calculations in the financial plan. 

Step 2: Design it

You're ready to start designing the business in detail and putting some strategies in place. Here are some of the things you may cover:

  • History and structure . The operating history and structure of the business, including the key people — the shareholders, directors, managers and staff.
  • SWOT analysis. SWOT stands for “strengths, weaknesses, opportunities and threats”. A SWOT analysis is a great way to test your business model.
  • Business assets. The assets you currently have or need to acquire, including premises, plant and equipment, information systems, intellectual property, licenses and insurance.
  • Goals and milestones. Set out your major business goals for the period covered by the plan, then set milestones for each step along the way. Try to make your goals specific and measurable.
  • Your business strategies. These include your marketing, sales and customer retention strategies. 

Step 3: Test it

You need to see if you can break your business model, by testing it for weaknesses. If you haven’t already researched your industry, your market and your competitors in detail, now’s the time to do it. These sections of your plan include:

  • The competitive landscape. Detailed information about the industry, the size and characteristics of your target market, and the strengths and weaknesses of your main competitors.
  • Financial forecasts. These might include calculations of your start-up costs and capital requirements, cash flow, profit and loss and balance sheet forecasts, and a break-even analysis.

Step 4: Redesign it

Your next step is to re-consider your business model in the light of your market research and financial projections. How can you counter the strengths of your competitors, or overcome the weak points in your own business plan? Do the assumptions you’ve made around key figures like potential sales really make sense?

Having updated your business model, go through your plan one last time to make sure it’s current and complete.

Step 5: Put it to work
Once your plan is complete, don’t stick it in the bottom drawer. Treat it as an essential business tool, and if your goals and circumstances change, update the plan. After all, it’s a working document.