Why Your Business Plan is the Business

Every business, and certainly every new business, should have a business plan.

It is one of the most important elements of setting up and developing a business, and it should provide a thorough examination of the way in which you see your business growing. It should describe the business, your product or service, the market you operate in, how you operate, the capital you will need to achieve your objectives, and projected financial results.

Having a business plan is not just good business practice - if you are looking for funding it is unlikely that your bank manager will consider your request without a considered plan in place.

A business plan is the best way to set clear objectives for your business, and to help you see its development clearly. It can help you to set targets for performance and monitor the finances and profitability of the business, and it will give you an early warning system for when you need to reconsider the way in which the business is operating.

The first area you should cover in your business plan is an overview of the business. This provides details of your plans for the business and how you propose to put them into action. Of all the sections in your business plan, this is the one that is likely to be read by the most people, so it is advisable to avoid jargon used in your industry.

You then need to describe your business, your objectives for it and how you plan to achieve them. You need to provide details such as how long you have been developing the business idea and the work you have already carried out.

Those reading the plan will need details of your key personnel, including you and any external consultants. You will need to highlight the skills of all these people, and show how you are going to deal with any perceived weaknesses.

You will be required to describe your product or service, and also identify your unique selling point - the thing that sets you apart from the competition. You should also outline your pricing policy at this point.

You will need to show that you understand your market, and also how you plan to market your business. You should identify your target markets and your marketing plan, and show an overview of your competitors and your likely share of the market. You will also need to show how you plan to develop within your market - this is your chance to show how successful your business could be.

Readers of a business plan will need to know how you plan to run your business, including operating practices and production methods. This part of the business plan is your opportunity to outline your requirements for premises and equipment.
The next stage is to include financial forecasts, which convert what you have said about your business so far into figures. It will include a cash flow forecast detailing projected money in and out of the business, as well as profit and loss predictions and a balance sheet. Detailed financial forecasts are usually included as an appendix to the plan.

The cash flows identified by the financial forecasts will show how much finance your business will need. Your business plan should state clearly how much finance you require and in what form. You will also have to identify what the finance will be used for and you will have to prove that you have the resources available to make the repayments. You should also give details of any security you can offer.

Your business plan is the core development vehicle for your business, so it is absolutely vital to get it right. Use the best professional advice you can afford to help you get your business plan in place.