A business plan will help you to set clear objectives for your business and clarify your thinking. It will also help to monitor finances and profitability and to set targets for future performance. Also, it would provide early warning for times when you might need to reconsider the plan.
Please note that anyone reading the plan will need to understand the what your business is about quickly and easily.
The business plan should cover the following areas.
This starts with your plans for the business and how you plan to put them into action. As this part of your plan will often be read by people unfamiliar with your business when possible try to avoid technical jargon.
Here you provide a description of the business, your objectives for it and how you plan to achieve them. Details of the background to your business should be included too. For example how long you have been developing the business idea and the current work you have carried out to date.
Here include the details of the key personnel including you and any external consultants and staff. Highlight the qualifications, skills and expertise that these people have. Plus cover how you intend to deal with any weaknesses.
Here include details of your product or service and your Unique Selling Point. Here you have to outline what you do differently, that the competition does not offer. Your pricing policy should be included here as well.
Here include details of your marketing plan and the markets you want to target. This may form the basis for a separate, more detailed, plan. Include an overview of your competitors and target of market share and details of the potential for growth. This is a very important part of the business plan as it gives a good idea of the possible chances of success.
Here include details on your proposed operating practices and production methods as well as the required premises and equipment.
Here include your projected financial performance and the assumptions made in your projections. This part of the business plan transforms into numbers what you have already said about the business. The plan should include a cash flow forecast. It shows how much money you expect to flow in and out of the business. Also, it should include profit and loss forecasts and a balance sheet. More detailed financial forecasts should normally be included as an appendix to the plan. As accountants and tax advisers we are well placed to help with this part of the plan.
The cash flow forecast will show how much finance your business needs. The business plan should show how much finance you want and in what form. You should also describe what the finance will be used for and show that you will have the resources to make the repayments required.
You should not view the business plan as a one-off exercise needed only when the new business is started. It is important that the plan is updated on a regular basis. This way it can be used as a tool against which performance can be monitored as part of the business planning process. So, if the business plan is used properly it keeps the business focused on its objectives and inspires a discipline to achieve them.