Top tips on how to create an effective business plan

In this article I will provide some essential pointers on how to write the perfect business plan to help your business succeed.

Whether an established business or concept-stage start-up, the business plan is a nuts and bolts action plan, an essential tool for both marking out the future and reviewing the course along the way.

What is a business plan? In short, a business plan is a document that states the business goals and how they will be achieved. Every business should have a business plan. It might be a brief one-pager, or it may be an all-encompassing report including marketing and financial plans.

The business plan is key when applying for a loan or convincing potential investors, in fact this will be the first time many business owners will prepare one. Aside from raising funds, however, there are many other commonly overlooked benefits to writing a business plan and referring to it on an ongoing basis.

The process of writing a business plan allows for a step back from being absorbed in the business, it forces time for research and evaluate and brings greater clarity on a strategic level. The business plan will assist in steering the business from A to B, identifying possible problems and helping to manoeuvre around them.

Writing a business plan:

Audience – Consider who your business plan is for. It may be aimed at potential investors, attracting business partners or simply for personal reference in developing your business. Write your plan with the target audience in mind, anticipate the questions they might ask and include information that will be of interest to them.
Content – Write your business plan so that someone from outside of the business will understand exactly what your business is about and what it aims to achieve. Keep content short and simple, it should be easy to read. Your business plan should be individual to your business, typical content may include:
- Cover
- Contents
- Executive Summary
- Company Summary
- Personnel
- Products / Services
- The Market /Market Research / Strategy
- Competitor Analysis
- Operations /Premises / Equipment / Suppliers
- Financial / Costs / Pricing / Forecasts
Executive Summary – If the recipient looks at nothing else in the business plan, they are going to read this section. Your executive summary should outline the entire plan, use it to capture your audience’s interest. Are you able to explain how your product or service will benefit your customers? If you are unable to put forward an argument for this, it may be worth revisiting your business idea. Work out what makes you unique. What will your business offer that no one else does? Differentiating your product / service from the rest of the market will help make you stand out.
Be Realistic - The brutal reality, at the very base level a business plan will outline whether a business idea is viable or not. Realism is fundamental to creating a business plan – ensure your business goals and expectations are clear and realistic – be your own critic! Confidence in your business proposition is essential, a certain level of optimism goes a long way – and creates interest, however unrealistic goals will inevitably cause disappointment further down the line. Over-inflated sales figures or underestimated costs will be obvious to potential investors and reduce your plan’s credibility at the least. Know your market. Establish that there is a market for your product or service, show that you know how to find your target market and be clear on the competition. Consider likely issues, such as competitor activity, and address them in the business plan. Acknowledging potential problems and having strategies in place will be reassuring to investors and give you peace of mind. When writing a business plan there is a fine line between optimism and realism. Finding the balance is crucial, especially where investors are concerned.
Presentation – A business plan should be clear and easy to navigate at the very least. Include a contents page and make sure the document order flows well. If your plan will be viewed by anyone but you, ensure it is typed, spell checked and grammatically correct.
Resources – There is a wealth of information available at your fingertips, make the most of the internet, you will find countless templates and examples of business plans.
Revisit your Plan – Remember that your business plan will be helpful in the future. Don’t forget to review your plan at regular intervals, updating and referring to it as both your business and the economy changes. Your business plan is essentially your roadmap.