Is your business plan up to scratch? Is it really doing its job as the blueprint to lead your business into the future? Let's look at some of the key points to be included.
Upfront you need to describe what your business does and the goals and objectives you wish to achieve in your business – let's face it, you've got to have a dream or a mission and this is the place to state it.
Researching your market and your competitors is important before you go into business. Information about market size and growth and whatever 'intelligence' you can find about competitors should all go into your business plan. This information can then help plan your marketing strategy – what segment of the market will you target?
A SWOT Analysis helps you work out the strengths and weaknesses of the business and what opportunities and threats you are facing. You should be looking to maximise your strengths and opportunities and develop strategies to overcome the weaknesses and threats.
Once you've looked at the market, the competitors and done the SWOT Analysis, you can put together your marketing plan – a key section of the business plan. The marketing plan considers the four Ps of marketing – having the right product, how you will price it, the place you will sell it and what forms of advertising and other promotional activities you will use to promote it.
No business can operate without an effective human resources plan. The long term vision for your business has to give thought to who is going to help you reach your goals and how you are going to help them do this. You need to plan the training and professional development you will offer, the way you will communicate, your style of leadership and how you will appraise performance and give feedback.
Now you can prepare a budget which will give you an idea of the trend and seasonal fluctuations of both sales and expenses and will indicate the viability of the business in both the short and medium term. From here you'll have to work out what capital expenditure will need to be undertaken to achieve the budget forecast.
It should now be possible to prepare the cash flow forecast on a detailed monthly basis, taking into consideration the current trading terms for such items as debtors, creditors and wage payments. You'll also need to consider 'seasonal' trends, especially relative to sales and stock purchases, as well as the arrangements negotiated with banks and financiers relative to loan repayments, owner's drawings and income tax payments.
A prudent section of any business plan should be a sensitivity analysis. This is a 'what if' study to test your ability to react quickly to incidents affecting your business. The planned action of this analysis is the contingency plan that can immediately be put into effect when called upon. It's much easier to have a plan in place rather than react irrationally to sudden events.
Finally, draw up an action plan – a detailed list of all the work to be completed as listed in the business plan. Assign each task to a person and write down the deadline for when the work should be completed. Review the plan periodically to discuss progress.
These are just some of the key points to think about when drafting your business plan. At Paul Martin Chartered Accountant Ltd we can help you put together the various aspects of your plan through our business planning service. Call us today on (09) 576 4166 for assistance or request an appointment online.