Written by: Christopher Chitty
A business plan has many uses and no matter at which state of progress your company is in; be it start-up or mature, it is like the sails on a ship.
The plan can be summed up as a written statement about your business with details on what you intend to achieve and how you are going to achieve it with a clear strategy.
There are some things your plan must absolutely have;
1. Structure: your plan must outline the structure of your business. This is essentially the foundation of your business, your analysis, strategies, executive summary and calculated goals.
2. Products or services: Detail down to the specifics what products or services you have. Include all involved parties such as suppliers or staff. Add incentives if there are any strategies and incentives to encourage your relevant staff to sell these products or services.
3. Customers: Describe in detail who your customers are, why you believe they will buy your products or services and how you intend to reach them. Marketing campaigns should be expounded here.
4. Growth: Explain in detail just how much potential there is in growing the business and by what quantity. Also explain how you intend to grow your business and how much growth, if possible, is expected in each quarter.
5. Finances: List out the current state of your finances and how you will grow it to become profitable. Determine a reasonable time frame to achieve this and the processes you will implement to keep you on track.
While it certainly helps set the course for your business, the business plan is also your official sales pitch to your lenders and investors. An ironclad plan without fluff and lofty ideals will serve to sell the idea of your business to these people. It has to be realistic and devoid of any loud exclamations such as, ‘I expect to make a million dollars in six months.'
Inserting unrealistic expectations in your business plan will work to your detriment. Investors are not interested in any plan that is not grounded in reality. If you are a start-up business, six months may or may not be enough time for you to be cash positive.
Set a realistic amount based on your situation and type of business and detail how you intend to achieve it step by step.
How you intend to manage your cash flow, grow it, pay it back and make more is of crucial importance, therefore your analysis of your finances will need to be heavily planned out.
Your business plan will be your lighthouse. It is the one thing which will help guide your company no matter which stage it is at. Even big multi-national corporations (MNCs) invest time in reformatting and adapting their plan to their business.
Directions change but it is always a good idea to manage that change.
After all, rarely are surprises in a business a good thing.