Where is your business going” Having a business plan is vital to document how your company aims to achieve its goals – and what strategy and actions are required to reach them. Once complete, your business plan can act as a benchmark for the performance of the company.
Obviously every company’s situation is different so you need to think about what the business plan is meant to achieve. Usually, it’s a documented strategy and action plan covering a three to five-year period. Or you may be preparing it for an external stakeholder such as the bank or a potential business partner or investor, in which case you will need to think about “selling” the company and its potential.
Depending on your size, this should not be task undertaken alone. Involving employees will help you build a committed team who feel part of the bigger picture.
Some basic tips on writing your business plan.
First, be realistic – there’s no point in your sales, turnover and profit forecasts being nothing more than a wish list. They have to be based on solid facts.
Second, make sure it looks professional. Have a contents page and an executive summary giving the key points. Try to keep the overall plan concise and avoid long, detailed documents – they may look impressive but they’re of little use on an ongoing basis because they become unwieldy.
In terms of the overall content, you should cover the following points:
- The business: Give a brief company history including recent performance and current structure and an explanation of your product or services and what makes them different. Outline any USPs.
- Your market: Define your market’s size and your share of it. Who are your customers and do they fit the profile of your chosen market” Outline any market trends and what’s driving them as well as any opportunities to increase market share. List your competitors and how much of the market they have.
- Marketing and sales: Where do you sit in the market” Also outline your pricing and how you promote your service or product. Discuss distribution channels and how you reach your end users, and analyse your sales methods.
- Management team and staffing: Detail its structure, skills and efficiency and consider the future – what you would do if faced with a loss of a key member” What is your succession plan?
- Operations: Consider your premises, production facilities and information systems – are they all fit for purpose and what about going forward Reliability and development of IT systems to help your business are key issues when considering expansion and growth.
- Finance: Detail previous years’ figures – up to five years if available and include an up-to-date balance sheet and profit and loss account. Include financial forecasts for the next three to five years and remember, again, to be realistic explaining your assumptions behind your forecasts. Make sure they allow for problems, delays or market volatility.
- SWOT analysis: Analyse your strengths, weaknesses, opportunities and threats and outline what you are doing about them.
- Driving forward: What will be your key ingredients to future success” Where do you realistically want to be in three years’ time Set objectives which will make a difference to your business and targets for these so you know what to achieve by when.
Once you’ve written your business plan, remember that it is always a work in progress and should evolve as your business evolves. Revisit it at regular intervals to ensure that you are on track and make adjustments where necessary. Your plan should become a constant benchmark for the company’s performance and should help you focus, identify priorities and ultimately achieve, or even supersede, your business objectives.
Helen Reynolds is managing director of HB RIDA, a joint initiative between James Caan’s Hamilton Bradshaw Private Equity and The Recruitment Industry Development Agency. A business coach and entrepreneur, she provides support to fledging and established businesses through a unique set of development programmes assisting recruitment business owners to grow and develop their own firms.