Writing a business plan might not always seem like a priority. There are bills to pay, staff to hire and stock to purchase. But every successful business has a robust plan at its heart – outlining everything from its founder’s initial idea and ambitions through to medium-term strategies, objectives and financial forecasts.
Think of it as the supercharged sat-nav for your business. A document that gives a whole overview of your purpose and the mechanics of your operation that can be used to guide your growth, check progress against objectives and . Investors, employees and lenders are just some of the stakeholders who might want to review it.
Ultimately, it’s an exercise that will remind you of all the reasons you started the business in the first place. And studies have proven that having a business plan helps you grow faster.
There’s no right or wrong way to write a business plan – it’s a unique reflection of your business and brand after all. But before you get writing, there are three important principles to remember:
- Consider your audience?
- Think about who the plan is for and how you’d like them to react
- Keep the plan short
- Put extra detail in an appendix if required
- Keep the plan professional
- Make sure it looks good and is accurate and realistic
There are several specialised online resources to help you structure your plan – including free templates – but there are some key elements which you’ll want to include:
1. Executive summary
Keep this short and to the point. It’s an overview of the whole business including its overall mission, offering and financial position. It should reflect the sections found in the rest of the plan, so it often makes sense to write this part last. Also be mindful that it might be the only element that some parties read so keep it impactful, easy to digest and accurate.
2. Company description
Start at the beginning: the history and structure of the business and who is involved – highlight their skills and experience and their specific role in taking the business forward. Focus on the central idea behind the business and your core products and services. How do they meet the needs of your customers? What makes your products unique or superior? What makes your service different?
3. Market research
This is where you can provide details of where your business sits within the wider industry. Who are your customers? What are the recent industry trends? Who is your competition? And how does their service differ from yours? Think about incorporating a SWOT analysis here (the strengths, weaknesses, opportunities and threats relevant to your business).
4. Sales strategy
How do you propose to market and sell your products and services? Do you sell directly to the customer or through ar third party? What is your current sales conversion rate? How long does it take to make a sale? And what proportion of your customers or clients come back and buy again? The rationale behind promotional and marketing strategies can be set out here.
5. Business operations
Do you own your premises? Do you use production facilities? How resilient is your IT infrastructure? Detail any relevant information on production processes, supply lines and fulfilment.
6. Financial forecasts
Financial forecasts are an essential component of any business plan – a quantitative way of assessing the viability and success of what you’re proposing. It may feel daunting to lay out all the incomings and outgoings in black and white, but ultimately the success of the business rests on these numbers working out.
Maintaining up to date balance sheets and cash flow forecasts is an important discipline but there is plenty of help out there, including several free templates to get you started. Checking with your accountant is a sensible first step or an independent small business adviser that can help you free of charge. They’ll be able to guide on the key principles such as using a clear and consistent layout, how to reflect historical financial information and ensuring forecasts are realistic and accurate.
A business plan helps you get your head out of the day-to-day and plan for the future. Keep it up to date – this will mean when challenges or opportunities arise you’ll be able to make quick and informed decisions. And if that includes accessing the funding you need to grow and prosper, then all the information you require is to hand.
