To put it simply, a business plan is a written document which outlines the plan for a business. Writing a business plan is an essential step for anyone who is looking to set up their own company. However, a business plan isn’t just for start-up companies; a good business will continue to make and revise business plans on a regular basis.
What is the purpose of a business plan?
Business plans might focus on one specific part of the business that you want to develop, such as finance or marketing, or, more typically for start-ups, it will cover all aspects of business planning.
Usually, a business plan for a start-up company will outline the nature of the business, its goals, and the plans and strategies for achieving those goals. It will also discuss the target market and any relevant financial information, particularly if it will be shown to investors and shareholders.
Essentially, the content of the business plan is entirely directed by its purpose and its intended audience. There’s no set formula for a business plan; instead, it should be tailored to the intended audience and the goals of the business.
You might compile a business plan for investors and shareholders, or you might simply create an internal plan for directors and company employees. A good business plan can be used to secure investment or reassure shareholders, but it can also be used as a way of measuring your own success and evaluating whether or not the business is fulfilling its objectives.
What should I put in my business plan?
A business plan, by and large, should contain an executive summary, a short description of the business, and an outline of the marketing and sales strategy, business operations, management team and company personnel. It should also include the business’ financial forecasts. These are the kind of things that potential investors and shareholders will be interested in.
For in-house business plans, you might want to go into more detail about legal plans, vision and strategy and the various sub-plans (e.g. marketing, finance and operations). These really detailed in-house plans shouldn’t be shown to investors or shareholders, but it’s always good to mention that you do have these plans.
How should I present my business plan?
All in all, your business plan shouldn’t be too long. Investors and shareholders will balk at the prospect of a heavy slab of a business plan being hefted into their laps. Instead, you want to create something more akin to a detailed booklet.
The layout of your business plan should be professional and clear. It should be easy to read and easy to navigate. That means included a cover page, a contents page and page numbers to make it easier for people to find the information they want.
If you’re producing paper copies, use a professional binding; haphazardly clamping it together with a stapler or paper clips won’t impress. Use subheadings to split your pages up and use a readable, professional font. If you’re emailing your business plan, convert it into a PDF document or use simple formatting so it won’t get mangled from one computer to the next.
Make sure you check your business plan thoroughly for mistakes. Get someone else to go over it with a fine-tooth comb for spelling mistakes and grammatical errors. You also need to double check your facts and figures. Get your friends and family to read it and see if they understand it.
Try it out on someone who knows nothing about your business and see if they can get a clear picture of your business from it. Get a professional opinion on it too: this might be from a business owner, someone in your industry or your accountant. Be prepared to redraft sections that don’t work.
Your business plan should be a labour of love. Business planning is an essential part of running your own business and securing funding. As the popular proverb goes, “he who fails to plan, plans to fail.”
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