Show me the Business Plan!
Where’s your Business Plan? Do you know? Think before you answer!
Such a crucial document; arguably the lifeblood and backbone of any business. Whatever it’s called not only should you have one but you should make sure it’s up to date! If you’re thinking about starting a business; if you’re a new business; if you’re expanding your business; how can you get the best from you and your business, if you haven’t defined a starting point? Located an end point? Shaped the direction you and your business are going and how you are going to get there and check if you’re on course?
Ok here’s how it is. Any opportunity I get I beat the drum, wave the flag and sing from the rooftops for business planning. Thankfully the business plan is alive, kicking and current in many small businesses. Sadly, this isn’t always the case. So many times I talk to business owners when they’ve sought help and when I say, ‘Ok let’s take a look at your business plan’… The silence descends, the tumble weeds roll through the room and yes I can often hear a far off bell tolling! You’ve guessed it’s one of two answers; ‘No business plan,’ or ‘Yep I did pull a plan together but I’m not too sure now where…’
All of us are different. Some people enjoy business planning but I’ll be honest when I’m supporting people to develop their business ideas and plan their business strategy there’s no better way to see a room of eyes glaze over than when you mention the words business plan. But it really doesn’t have to be like this.
How can a business plan help?
Starting, running and growing a business is all about risk. Through a well researched and clearly explained plan you can demonstrate how you are minimising the risk. Great for people who may need to see the plan, the banks and potential funders when you find them. But it’s also great for you to capture, frame and validate your business direction.
So what’s included in a typical business plan?
As a minimum, you should include details about yourself and your experience, details about the product or services offered by the business, the key management roles in the business, your idea and the underpinning research / analysis, how you know the market for your business, how you communicate with your customers and the good old financial projections.
The language of the business plan is also important. Language should be positive, demonstrating a belief in the business e.g. ‘the business will’ and ‘research demonstrates’.
Let’s put it simply, if I read a plan here’s a few questions I usually have in mind:
- Is the plan believable and realistic?
- Do I believe the person/business can do this?
- What in essence is the product/service?
- What does it do?
- Will it sell?
- Will there be growth?
- Is it innovative?
- What do the financial projections look like and have they been explained?
If you need to meet the bank manager, find funding or business support a great business plan can also be a great marketing tool, demonstrating your confidence and belief in your business.
Yes, business planning takes time. After they’ve worked hard developing their business plans so many small business owners tell me it’s time well spent; planning really makes them think about their business. The process also challenges them to assess any preconceptions or issues that may develop day today; pausing to stand back is crucial. A business plan isn’t the answer to everything but as the cliché says knowledge is power. So knowing your business inside out and exactly where you want to take it, has to be a good starting point.