Where to start when developing a business plan
Determine why the business plan is being written. Will it be used primarily to keep the business operating well, or will it be a pitch provided to potential investors? Will it be shared internally to help drive business decisions or solely viewed by yourself? This will affect the amount and type of information that will be included in the document.
When used primarily by business owners and leaders, first decide the goals for the organisation. They may be short-term goals that the company should achieve in its first year, or they may be long-term goals that align with the vision of where it will be in five or ten years’ time. Goals may not be tied to a specific timeframe but rather be points of achievement, such as reaching a certain revenue value or a certain number of customers. Goals can be small or they can be extremely ambitious – the point is to get them included, as goals cannot be worked towards if they are not actualised.
If the business plan will be a pitch to receive funding, it will need to include information on finances. While the bottom line is important for any business owner, it is more relevant and important for investors to know how much money is required and how much they can expect to reap from it, that their loan will be repaid, or that their funding grant will not be money lost down the drain. Try to address any concerns that they may have in the document, for example by including evidence that there is a customer base for the product or service, or inserting data (from internal or external sources) that substantiates the financial projections.
Once the type of business plan has been determined and the goals have been listed, the detail can be included. However, not all the answers need to be defined at this point, nor do all the measures listed to achieve the business goals need to be guaranteed to be successful.
Decide on the type of business plan
There is never a wrong time to develop a business plan, and it is never too late to do so. It can be developed when the business is in the feasibility stage, or fledgling and in need of new funds to continue its expansion. A business plan can be a useful tool regardless of how long a business has been up and running, and whether or not growth is the objective. There is no one-size-fits-all reason or time to develop the business plan, and the same goes for the type of business plan that is devised.
If the document is for internal use or by a sole operator, it may not need to be formal or even go beyond a simple page. It could be a simple mind map, with offshoots detailing in a sentence or two the desired objectives and how they will be achieved, and may just be scrawled on a piece of paper. Or, the business plan could be typed up as a document using headings or a new page for each goal listed.
Many online business plan templates are available to download that can take business owners and operators through the process step by step, while business plan examples can also help point you in the right direction.
These two types of business plan are low-cost ways to complete the process and can also be filled out at any time that suits you.
If the plan is to be seen by investors, a formal proposition may need to be developed. Again, templates can help. However, there are many business advisers and accountancy services that can provide assistance with writing a business plan. They may ask questions and raise issues that you may not have considered, and be able to identify the best ways to achieve the goals outlined. If you already have the basics put together, these advisers can revise a business plan and make suggestions on how it can be improved to ensure greater success. When presenting the business plan to them, they will usually require a digital copy, but a physical copy printed out and compiled in a booklet with binding will add a professional touch.
The point of a business plan is to get the goals and direction down on paper to provide a clear outline and ensure accountability, rather than being about the format.
Choose what to include in a business plan
Business owners and operators may already have a good idea as to how to achieve the objectives they have or meet their desired goals, based on their experience and knowledge from working in the industry or in the business. Still, it is worthwhile to include a sentence or two as to how the goals can be achieved to ensure clarity, particularly if the document is to be viewed by external parties.
For the unknowns, such as if the business is new or the challenge set is yet to be experienced, extensive research may be required and outlined in the plan. For example, if the business has been successful in securing customers from word of mouth and advertising services in the past, but wants to grow its customer base, the best methods to target first to expand its potential may take some analysis.
A business plan does not need to be all positive news. Outlining and addressing risks and weaknesses in the document can be a good way of demonstrating that the realities of the situation have been acknowledged and understood, as well as being a way to ensure that methods to overcome them are devised.
Don’t be afraid to consult with other business owners through your networks for help. Even if they do not operate in the same industry or their business is bigger or smaller, they may be able to provide invaluable advice from their experience of what works and what doesn’t. Creating a business plan may also be a good time to seek a mentor who can provide ongoing business advice and keep you motivated to achieve business goals.
Supporting documents may be useful to have available, but may not require inclusion in the business plan. These may range from letters of reference or a personal credit history to patents, leases and completed contracts. Consider including a list of the documents that are available on request in the business plan, rather than inserting them on the final pages of the document.
Other things to consider when developing a business plan
Whatever type of plan is used and whatever content is included, there are several things to keep in mind when developing a business plan:
- Keep the business plan succinct and to the point. Avoid waffling on about hopes and dreams and stick to what is actionable, achievable and relevant to the reader.
- Use layman’s terms rather than industry-specific or technical phrases, which those outside the industry may not understand.
- Include the motivation or vision, as revealing what is driving the business can be a powerful way to convince others to get on board.
- A business plan does not need to be finished in a day, and can be honed over several weeks or months.
- Revisit the business plan over time to ensure it still meets the direction or financial needs of the organisation, and update or change it if required.
Whatever way you use to develop a business plan, the important thing is to make a start. The right approach will be the one that fits you or the business’s needs and also serves the purpose for which it was implemented in the first place.
