Many people who’ve run businesses before have done so successfully without Plans. But then they need more money;to grow, to get a lease, or to buy into a franchise – and so they are asked to submit a Business Plan. Here’s why:
- People who are about to give you something (such as money, use of their property or land)
,want to understand how you’re going to succeed. They want to be able to share your confidence.
- Making you go through the process of asking yourself all these questions, and answering them, is as important as the final document.
- Writing something down helps you become express your thoughts and ideas in a much clearer way.
- Doing all these three things reduces your (and their) risk.
But knowing how to write a business plan is a whole other beast. The steps at a glance:
- An Executive Summary – this should only have stuff that is in the Business Plan, nothing new should appear here. So why bother? Because you need a pithy, concise summary to get people interested.
- What business are you in? Again, a short, sharp definition of what you do, where you are, and when you’re open.
- What’s the market need – prove it! Your Business Plan desperately needs market research and analysis
,so you can prove to yourself that there is a market out there. Many people start by identifying a gap in the market, but often it’s not big enough for there to be market in the gap
- Who are you going to target in the market?
- How much are you going to charge?
- Why will people choose you? How will you be different?
- And who will you take market share from (i.e. who are your competitors)?
- Operations. Whether it be your team, yourself, your processes, or your systems, you need to prove to yourself and others that you can actually run this business efficiently, effectively and most importantly…profitably. Which leads us to…
- Finances. As before, this is all about proving to yourself that you will make a profit, grow quickly enough, and not run out of money, even if you’re doing well. To do this, you need at least three ways of looking at your finances:
- A revenue forecast, which sits within the…
- Profit and Loss.
- Balance Sheet.
- Cash Flow forecast.
These can all be found from the internet, free, plus instructions if you want to do it yourself. If you would like to use our templates, also for free, click here.
There are several ways of taking yourself through the process of adding in content and answers to the questions and sessions above. Sometimes, these can be done on your own. Or you could ask an honest, objective friend with some experience of business to review the questions and make sure you’ve answered them thoroughly. Or you could Google things like ‘What does a good SWOT analysis look like”.
Most of the templates and market research will mention things like SWOT analysis and PESTLE. Or you can hire someone like Small Business Plans – yours truly!
If you and/or a friend write it:
- Avoid grandiose, flowery language such as “We are strategically positioned to maximise the opportunity due to our team of seasoned professionals”. Likewise…
- Don’t imagine that you have no competitors – you either have direct competitors, indirect competitors, or things that can, to a certain extent, do what you are offering.
- Don’t worry overly about your written style. A lot of people think that the skill of Business Planning is in fact writing. It’s not. There are several online tools that will help you improve your style, some of them even come pre-loaded with Microsoft Word and PowerPoint. Or you can download a free subscription from Grammarly. The real risk here is that you confuse good writing with good thinking. The thinking is key, and if it is clear and clearly written down, then the style of English, or even the odd typo is not that important.
Finally, it’s unusual to find people who enjoy thinking with all six parts of their brain (critically, analytically, creatively, laterally, optimistically, and pragmatically), which is a must when learning how to write a business plan. Therefore, it makes sense for you to focus on what you do well and get some help to learn or even buy these skills