Prepare a Business Plan

It is essential that every business has a business plan in place that works. It is just as essential that the business plan is realistic and tailored specifically to meet the purpose of the business, and that it is followed.

What is it?

A business plan is a document that is compiled to show the businesses aims and objectives, its strategies, the market it is in, the customers it is targeting, a competitor analysis and its financial forecast.

Why do you need one?

The purpose of a business plan is to make sure that the proposed venture will make money and the will be financially stable; otherwise the business will cease to function. It is important to be ethically and socially responsible as a business, and it can improve your image if you are seen to be acting in such a way. Elements of how you propose to be corporately responsibility should be included in your plan. A business plan has a number of purposes. Primarily, it secures your external financial position and it is a means of measuring the success of your business.

Who is a business plan for?

Anybody with an interest in your business will want to see your business plan, but obviously essentially you decide who sees it. As it a means of securing your external funding, your bank will want to ensure that the document is as legitimate as possible as they are potential investors into your business. It would therefore be beneficial to you to ensure that your plan is as viable as possible before you show it to your bank.

The business plan, essentially, is for you. It is a means of identifying what market your business will operate in, what products you intend to sell, and identifying your potential and current competition. It enables you to also identify any pitfalls before they get you into trouble, because even if you do not spot them, letting friends or potential partners, or even a solicitor have a read may result in potential problem areas being spotted and you being able to resolve them.

Anyone who is interested in buying your business from you may wish to see your business plan so that they can gain an insight into where you were going with it and what you hoped to achieve. Consequently, it is imperative that you treat your business plan as a live document and update it all the time. This is important because if you diversify your product range, for example, this could impact the market you are operating in, the consumers you are targeting, and your competition, all of which could have a substantial effect on the financing of your business. You may, for example, need to borrow more money to expand an existing range in your product portfolio, and if this is worked into your business plan, you will be in a much more favourable position with the bank.

Be aware when writing your business plan that not everybody who has an interest in your business will be as business-minded so try to avoid using jargon and explain fully about the service and the products you will be offering. Make sure you get someone who is impartial to read your plan and make sure they can understand it.

What should a business plan include?

Your business plan should provide detailed information about the intent of your business and how you are going to develop it from an idea into a real up-and-running business.

The structure of your business plan can be categorised into sections as set out here. Your business plan should be of a manageable length, therefore keep it as short and concise as possible and make sure it looks professional as this will reflect your seriousness of opening a business. Ensure that it is proofread before you get it printed out on top quality paper and bound.