You have a great idea for a business. You’ve researched the demand and can see there’s a desire for the service or product you want to offer. You have costed up its manufacture, it’s delivery and the margin in there so you can make pots of money. You have researched the market and know that competitors are not delivering what you’re offering for the price you’re offering or else there is so much demand there’s room for you, too. Now all you need is some funding so you can get things into operation.
So… where to from here?
A great business plan is where: the essential tool for any business that helps focus your working energy and helps ensure you achieve your goals. And your funder will absolutely require it.
So where do you start?
You more than likely have a lot of ideas you’d like to share, but popular opinion says your business plan should focus on:
- What your business does – the situation and gap in the market, what you’ll do and how it meets that demand;
- Key objectives for the next year and then three to five years and how you’re going to meet them in general terms;
- Your estimated day-to-day operations and financials – cashflows on a weekly basis, with both conservative and optimistic alternatives; and…
- The steps that will allow you to achieve your goals.
Getting started
Have a look online for the best business plan template for you – there are lots of different structures to choose from. Once you’ve chosen a favourite, start capturing the contents of your plan by noting down ideas and key points under each heading. Then sort them into a logical order before writing them properly into the plan. The plan itself should be relatively short – sometimes no more than ten pages. This is a topline plan, not the detailed ones which come after.
Who your plan is for
Your business plan will be read by potential investors and lenders, potential business partners, buyers, possibly your staff, and possibly others. So with all these audiences in mind it’s good to keep language as simple as possible.
Avoid any unnecessary information or words and try to write in bullets or use visuals if you can; it just makes it easier to read. A good tip is to keep numbers realistic and stay conservative – it’s usually better to under-estimate and over-deliver – and then your conservative scenario will be even more brutal and if the idea still makes money then you’re probably on to a winner.
Critique for success
Once your business plan is complete it’s a good idea to have it reviewed by friends, mentors and advisers. A business plan needs a few sets of eyes and a thorough critique to ensure it is robust in its objectives and considered the right path to achieve these. Then get someone to read it through and spell check it too – people giving you money and typos don’t usually go hand in hand.
Evolve and grow
It’s a living document: don’t file your business plan in the bottom drawer to gather dust – keep it front and centre and refer to it regularly. Your business plan will grow and change over the lifetime of your business. To make it really effective, refer back to it regularly.
To make it relevant, keep it up to date. But most importantly if you start writing it today you need never look back – only forward.