Do you have a business plan?
If not, do you have a niggling feeling that you should have a proper, written plan for your business but the very thought of writing it makes you break out in cold sweat? No need to worry – business plans are not really that difficult to write.
The 5 Questions Business Plan Needs To Answer
Whether it’s a business plan for a brand-new venture, a supporting document for a loan application or a plan you want to use in running your business to keep yourself on track and accountable, it needs to address key questions relating to your business. These questions can be roughly grouped as follows:
What is your business idea? What products or services do you provide? What benefits do you offer to your potential customers?
Why do you offer that particular product or service? Why will it sell? Why would people buy from you and not from someone else?
How are you going to deliver your products / services? How does your particular market work in terms of marketing, distributions channels etc.?
Who is going to do what in order to deliver your products or services? Is it just you? Do you outsource certain tasks? Is there a team? What are the roles and their responsibilities?
- How much?
How much money are you expecting your business to make? How much do you need to invest? How much do you need to borrow, if anything? When will your business break even? How much of a profit margin are you expecting? What is your cash flow going to look like?
This is where you talk about your business numbers so you need to include a set of cash flow and other relevant financial projections.
In a nutshell, as a business owner, you need to be crystal-clear about what and why you want to do, how you’re going to do it, who is going to do what, and how much money it’s going to make. This is exactly what a business plan needs to demonstrate!
What Else Does Your Business Plan Need?
The above list of questions in each category is definitely not exhaustive as all businesses and their circumstances are different. It should, however, give you a pretty good idea of what your business plan needs to cover as a minimum.
If a purpose of your business plan is to apply for a loan, you may need to include some information regarding your relevant market context, e.g. information on market trends, overall sales volumes, prevailing prices, your potential competitors and so on. The reason for this is to make sure that your sales projections are in line with what could be reasonably expected. It may sound obvious but, for instance, it wouldn’t make much sense to predict increasing sales volumes of car accessories if the level of car ownership was going down etc.
Once your business plan is written up, don’t treat it as cast in stone. Things change over time so make sure that you keep revisiting your plan to check whether you’re still on track. If your business performance is not as expected, you can use your plan to help you decide what actions you need to take. Sometimes, the solution will be to change how you go about things in your business. In some instances, the original plan may have been overly optimistic, in which case you’ll need to revise it to more realistic levels.
If you’d like more detailed advice on writing a business plan, email me on firstname.lastname@example.org and we’ll have a chat to see how I could assist you.