8 simple steps to the perfect business plan
You know your market, you know what you want to achieve and you have the necessary skills. So why do you need a plan?
Plans help to clarify your ideas, keep you focused, and guide your business in the right direction. Although the plan may not always stay the same, it will help you to discover and solve problems along the way, gain feedback from others and act as a foothold in persuading people to invest in you and your ideas. It can also help you regain clarity if you become bogged down in the day-to-day.
Putting an initial plan in place can be an overwhelming prospect; our 8 easy steps will help you to create the perfect business plan.
- Summarise your business
This should be brief and catch attention. Describe the product or service you are selling as well as the goal and mission of your business. Why do you do what you do and, ultimately, what are you trying to achieve?
- Know your audience
The better you know your audience the more targeted your business plan will be. Have a clear idea of who will buy your products or services. Will your customers be consumers or other businesses? Will they be one-off buyers or regular customers? Identify the following:
- Demographics – age, gender, social status
- Location – where do they live, work or socialise
- Profession – are you targeting a specific industry or job type?
- Groups – do members of your audience share interests, habits or behaviours?
Carrying out research is key at this stage. Speaking to people can provide a huge amount of insight into the likely success of your business ideas.
- Know your opportunities
Even the biggest of businesses started somewhere. Starting small with big ambitions is a great approach, however, you need to pen your ambitions at an early stage to help map the path to get you there. Whatever you are looking to do right now, if all goes to plan, what other opportunities will there be for your business to grow? Planning for the short and long term will allow you to achieve what you want now, whilst making steps towards achieving bigger ambitions.
- Identify the competition
Outlining what makes you stand out from the crowd can be difficult if you don’t know who is already in the crowd. This includes direct competitors (those who offer the same product or service as you) or indirect competitors (those whose market overlaps yours).
Investors will be keen to know why you are different and why customers should choose your product or service over others – this might be based on price, service, quality, range or value.
- Know your figures
Every business plan needs to include an overview of finances and the costs of setting up your business. Consider any costs that you might incur at the outset as well in the day-to-day running of your business.
Your accountant or bookkeeper should be able to help you draft a financial model and recommend good accounting software that will make your life easier when managing your cash flow and finances.
- Marketing essentials
No business can survive without some form of marketing, so you will need to budget for it. Think about how to create interest in your desired market. How much will you charge and will the price you are charging be profitable? This information can be drawn from the research carried out for your financial plan.
Whatever the vision for your business, there is no escaping the day-to-day tasks that need to be carried out. What processes are involved, such as manufacturing, purchasing, sales, customer service etc? Do you need staff in place to deliver these?
The people behind a business can be paramount to its success, or equally its failure. Perhaps there are aspects of your business that you are not skilled in or which distract you from developing it. Consider sourcing staff that complement your skill set. Alternatively think about whether it would be beneficial to outsource these areas to experts.
Simplicity is key when drafting your business plan, keep it brief, relevant and focused.
Your finished business plan will act as a go-to document to remind you of the direction in which you are heading and to help keep you on track, but it is not set in stone. Alongside the internal factors affecting your business there are external factors such as the economy, current fashions, market trends and new regulations or legislation. There will be occasions when you need to adapt your plan to respond to or take advantage of changing conditions.
For help and advice on creating a business plan and putting it into action contact Adrian Le Roux.