In simple terms, a business plan is a written summary of what you hope to accomplish by being in business and how you will accomplish those objectives. It must contain clear goals and objectives with an explanation of how you intend to manage all your resources, i.e. premises, equipment and staff, as well as finances in order to achieve those goals and objectives.A business plan should be seen as an ongoing document that can never be completed.
When it seems complete a number of factors can make it immediately out of date, such as slippage in collecting money owed, or delays in receipt of supplies of raw materials. A good business plan for an existing business demonstrates that careful consideration has been given to the business’s ongoing development. In the case of a new business it shows that the entrepreneur has completed sufficient research and has the necessary skills and vision to succeed.
Why Do I Need A Business Plan?
A formal business plan should be seen as an important management tool by all businesses irrespective of size. It serves four critical functions:
- It helps to clarify, focus and research the development of the business or project.
- It provides a framework for the business strategy to be undertaken over the coming years in order for the business to develop.
- The document can be used as a basis for discussion with third parties who have either a potential or an existing interest in the business, such as shareholders, banks, or other investors.
- It sets goals and objectives against which actual performance can be measured and reviewed.
If you are seeking external support to start your business, the business plan is probably the most important sales document you will ever produce. It gives you the only opportunity to sell the concept behind your business and raise the funds to achieve success. Even if you do not require external funding, the whole planning process of thinking, discussing, researching, analysing and evaluating options forces you to understand more clearly what you want to achieve and how and when you are going to achieve it.
Where Do I Start?
In exactly the same way that no two businesses are alike, no two business plans will be identical. The important thing to remember is that a business plan must be tailored to meet the individual situation. Most business plans, however, follow a tried and tested structure with sub-headings to cover all eventualities.
A sample business plan template, with guidance on content is given at the end of this chapter. For now we will concentrate on the general style and content that you should follow when structuring your plan. The business plan will be divided into individual sections, and these
can be grouped together in the overall structure into three parts covering the areas previously outlined:
- where you are now
- where you want to be
- how you are going to get there.
Opening With A Synopsis
To the reader of your plan the synopsis will be the most important element. This could be your one and only chance to make a favourable impression on your target audience and you must not waste it. The synopsis must contain sufficient information in a concise format to make your audience want to discover more about your plans.
The synopsis should not normally be longer than one page and it should contain the following information:
- the background to your business or your business idea
- an outline of your proposals
- what you need from your audience.
This final part is very important. If you are putting a proposal to a potential funder you must tell them what it is you want from them and how it will be repaid. Whilst this will be contained in detail in the body of the business plan it needs to be clearly outlined from the beginning.