Creating a business plan to guide you through this year and beyond
Benjamin Franklin was a writer, scientist, inventor, politician, and more.
And while ‘SME manager’ wasn’t among his titles, one of his famous quotes is nevertheless a useful mantra in the business world.
“If you fail to plan, you are planning to fail.”
Even the best laid plans don’t always work out, but it’s far easier to know what you’re aiming for than to play it by ear.
This holds especially true in these uncertain times—when coronavirus continues to affect small businesses and their owners.
With many companies closing permanently due to the pandemic, and global uncertainty a permanent feature of our world, having a plan is more important than ever.
So how do you go about creating a business plan for your company?
Know your audience
The first step is to be clear on who you’re writing your business plan for. If you’re looking for investment or a loan, your plan will likely focus on financials that you can present to potential backers or a bank.
Otherwise, the plan might be a way to gather your own thoughts and guide you through the year ahead.
Business plans don’t need to be reserved for new businesses—creating or updating a plan in light of the continued disruption we’re experiencing is sound logic.
Identify your goals
If you're planning to start a new business, you’ll need a clear picture in your mind of what that business looks like. How does it make money, attract customers, and operate?
These questions can be just as important for existing businesses. Have you lost sight of where your business is headed? Now is a chance to refocus and get back to what you do best.
Get to the point where you’re comfortable giving an elevator pitch for your business. This is a description of what the business is and why it’s desirable that is short enough to tell someone during an elevator ride.
Consider your ideal employees
Who does your business require to operate successfully? Understanding this will help with recruitment and training alike. This will vary widely by industry—the ideal retail employee will likely be different from the perfect security guard.
If your business needs a certain skillset that it currently lacks, consider what steps you can take to add those skills through hiring employees or upskilling existing staff members.
Analyse the market and run the numbers
A product doesn’t look so good if it solves a problem no one cares about. Whatever your business does, it must be in response to a customer need. A restaurant will fail if there’s no demand for the food it serves!
Understanding the location of your business is often the first step to identifying your target market. From there, it’s a matter of building customer profiles and making realistic predictions about your place in the market compared to your competitors.
It will typically be worthwhile to hire a professional accountant to help you carry out detailed financial analysis. Considering aspects like your capacity, pricing, costs will offer a clearer picture of how much you can expect to make.
From there, the all-important question will be: can your business make money in the long term?
Keep it short and simple
Whoever you’re writing your plan for, you’ll want to maintain their interest. Even if it’s for your own use, do you really want to be trawling through a lengthy document whenever you need to refer to something in your plan?
Stick to the key details so that the big picture of your business is clear to anyone who reads your plan.
Additionally, if you’re writing for others, consider their understanding of the industry and use appropriate language. There’s no point filling your plan with niche jargon if your audience can’t understand what you’re talking about.
The use of tables and graphs can be a quick and easy way to convey key information, like your market share or financial projections.
Having a clear structure to your plan will help you put relevant information in the right place, and find it again easily when you’re referring to your plan. Each business is unique and so their plans will require sections that others don’t.
For example, running a bricks and mortar store means you need to consider your physical location and how that will affect your market and costs like rent, utilities, and insurance.
Running an online business gives you less to worry about there, but you will need to find ways to attract customers without them physically walking past your store.
As a minimum, you can expect your plan to have sections for an executive summary, a business overview, your market analysis, and a financial plan. Start with those and add in any additional sections as you need them.
We hope these tips help you to launch or reinvigorate your business.