A Business Plan: How to make it your roadmap to business success and obtain the finance you want
A business plan is not simply a document to obtain finance from a financial institutions or potential investor. It can and should deliver way more benefits than that. The most important benefit of a business plan is that it forces the business owner to think and plan strategically. It is a document that can help you stay on track when the road gets bumpy. And it is a document that should be updated frequently as circumstances change or new opportunities arise.
There are many areas that can be covered in a business plan and I will not list all of them here, but here are some of them.
Market Analysis.
You need to do research of the industry you are operating in or intend to operate in. What is the growth in the market, the trends and how is the market segmented? The most important information to get right is to know exactly who your target customer is and what they want.
Let’s say you intend opening up a carpet cleaning business. Targeting a low income area where students occupy the majority of homes may not be as successful as when the area is upmarket, the majority people in the area have small children and are over concerned about their kids contracting germs and illnesses. If you didn’t do your research you will find out the hard way .
What you are selling.
Include the current as well as future products you plan to sell or services you plan to offer. The more you can demonstrate you have tested the market and that there was sufficient interest in your product the better.
Your product’s competitive advantage
Why will people buy from you instead of the numerous competitors you are likely to face? What makes your product different? This is a crucial question to answer and one you need to spend serious time on as it can mean the difference between success and failure. The more compelling reasons you have the better your chance of success. The marketing folks refer to this as the Unique Selling Proposition or USP.
History of the business
When did it start or if it is a startup simply mention the fact.
Ownership of the business.
Give a brief background of the owners, their qualifications and especially any business successes they have had in the past.
Organizational chart and management team
What skills do the people you require need, what is a market related salary, what additional staff will you need as the business grow. Once again to obtain finance it is good if you can highlight the achievement of your staff, especially management staff.
Locations of the business and in which areas you plan to operate.
Do you want to operate locally, or internationally, will your premises be in an upmarket area or in a less upmarket area. Less up market customers are more price sensitive and you in all likelihood need premises in an up market area if you intend selling to people in Bishopscourt.
Financial history of the business
If you have been trading for a while it will be a big plus if you can demonstrate that there is a need for your product especially if there has been significant growth. Make sure you highlight all positives.
Marketing plan.
Without customers you don’t have a business and you never will, even if you have the best product in the world. The more time you initially spend to plan how customers will know about you and how you will you stay in front of potential customers so that your business is the first one they think about when they are ready to buy. There are plenty of options available and the more in depth detail your plan contains about the strategy you will follow the better your chances of business success as well as obtaining finance.
Operations
How will you deliver what you have advertised? There is no point standing in the street beating your chest if you cannot deliver what you have promised. Think through the potential problems you may encounter and how you will solve them.
Financial information
This can make or break your plan. A projected Balance Sheet, Income statement and Cashflow statement is the bare minimum. Make sure the cashflow statement support the amount you want to borrow and that the other financial information makes sense. Most that I have seen, prepared by non accountants using templates, don’t. Do not be overly optimistic and prepare a few sets of projected figures based on different scenarios.
Look at your plan as if you are the potential investor.
Does the information in the plan excite you? Have you seen enough proof that the business idea will work?
Need help?
Whether you need a business plan drawn up from scratch, help with the financial part or need an accountant to look at the financial information you have prepared, we will gladly assist.