The importance of a good business plan

So, you think you’ve come up with a great business idea? Now all you have to do is create a business plan which illustrates how your idea really is viable in practice.

For some people forming a business plan may seem a rather intimidating prospect because ultimately it will reveal whether your business idea is a realistic proposition. And if it turns out it’s not? Well, you’ve just wasted your time haven’t you? Err… not really. Based on what you’ve discovered you can then either alter your plan or come away from the experience wiser for it. It’s a ‘win-win thing!’

From the outset of the plan it’s crucial to have a keen attention to detail and take pride in the presentation of the document. If you take a slick and professional approach from the beginning then this habit will continue throughout the process and make it easier for you to return to the project after a break.

These are the basic requirements for a business plan:

A majestic Front Cover

• This should include a title or heading for the plan
• A brief description of the plan (if required)
• Company name
• Author
• Date

A snappy Contents Page

• Listing
• Your
• Plan’s
• Contents

A beguiling Introduction

• This should give a general overview of what will be in the plan and what its general purpose is.

An excellent Executive Summary

• This is an overall summary of the contents of your plan. If people want a brief overview of your business plan, this is where they will look. For that reason it will be easier to write this once the rest of the plan has been completed. You can include key facts, figures and findings.

An elegant External Analysis

• The External Analysis you should leave you with a complete grasp of the environment your business is set to enter.
• It’s all about detailing the current market environment. What are the current market trends? You can get free information about the current state of the market relevant to your industry via a range of sources. These include your local council, your local Business Link or a particularly handy online resource.
• Take a good look at the competition. Who are they? What do they do? How do they do what they do? How similar are they to you and where do you differ?
• Economic considerations.

An informed Internal Analysis

• The Internal Analysis should make it clear exactly where you and your business stands today.
• What is your core business? Establish what service or product you are trying to sell.
• What tools do you have at your disposal? This will include staffing and finances.
• Undertake a SWOT analysis: Strengths (relative); Weaknesses (relative); Opportunities; Threats.

A full on Action Plan

• The Action Plan allows you to look at where you want to be in the future – and what you need to do to get there…
• Spell out exactly where you want your business to be in the future 12, 16 and 18 months down the line. You can put down shorter-term goals if needed but it’s very important to know where you want to be at least a year down the line and preferable longer.
• Detail how, in practice, you will reach your goals. How will you make the money you hope to make? This may include marketing considerations.
• Ensure that your Action Plan is SMART – Specific; Measurable; Achievable; Relevant; Timed.

Appendices

• Facts, figures and research documents.

And that’s about it. There are a number of different methods of forming a business plan but this is a good general guide for those unaccustomed to producing such a document. Preparation is the key to any new business, and as your start-up idea should be something you’re naturally passionate about, the planning process should actually be a bundle of fun for the most part.

Image by Generation Bass ~ cc

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