Developing a Businesss Plan

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A road map for your business:

A business plan is like a road map: as your business takes new pathways you need to recognise the milestones along the way and take a reliable route to the planned destination.
This map is especially important when you are in unfamiliar territory—when you take your business to new markets, develop new products or services, or your market changes.
You may not need this help around your local area, but once you drive in unfamiliar territory your map is vital.
The business plan is the most important document you will ever prepare for your business. It describes all aspects of your business venture: from what services or products you intend to deliver, how you intend to deliver them, through to financing and marketing strategies.
For a business to be truly successful, it needs to demonstrate sustained success over time. To be sustainable and remain profitable in the long term means a business must take account of the social and environmental impacts of its activities. Your business plan represents the final product of all your reflection, market research and planning. In essence, it is your map for business success—it identifies clearly where you are now, where you are going, and how you plan to get there.
To succeed in small business you need more than money and dreams— your business also requires careful planning and committed follow-up. It is important that you plan carefully before launching or expanding a business. Once you are established in business it is important to update your business plan at least once a year.

Your business success depends on your ability to supply a product or service to meet
demand. But the marketplace does not stand still—it is constantly evolving. It is
therefore essential that you rethink your business plan regularly to ensure your business
keeps pace with the competition and with the changing expectations of your customers.
This means that the business plan you prepare will never be complete, but it should
be the best current version of how you perceive the reality of your business in the
marketplace.

Advantages of a business plan:

There are two main advantages to preparing a business plan. Firstly, it serves as a road
map to guide you and your staff towards your business goals. Secondly, a well-presented
and carefully considered plan will go a long way towards establishing your credibility
with bankers or potential investors.

What preparation do you need?

Set aside some time when you will not be interrupted or distracted by other activities.
Start by updating your existing records and organising your available material, as this
will save you time and effort later. Also consider defining some basic values such as
business ethics and integrity, staff, customers and the community, the environment and
the use of material and energy resources.
Be prepared to consider various alternative views as you work through the plan, ranging
from optimistic expectations to ‘worst case’ scenarios. Such alternative viewpoints will
help you to identify both the opportunities and the risks or unexpected crises that are an
inevitable part of running a business.
Remember that your business plan should be a call to action, a living document, not
simply an exercise you go through to satisfy bankers or investors and then file away
to be forgotten. The time and effort you put in to your plan makes it a tool for you and
your staff to keep your business on track for success. Use it

Purpose of the business plan 1:

You need to outline exactly what the business plan is for. There is no point in writing
one unless you have a good reason. This will also assist when you come to write the
plan. For example, if the business plan is being written to identify the direction of the
business, then you do not need to add in information for investors. You are not after
finance.
Business plans should be written for a specific purpose—you should not have one
generic plan that you hand out to everyone. If you need to raise finance then write
a business plan that focuses on return on investment. If you need to develop an overseas
market then write a business plan that focuses on exporting and distribution methods.
As you work through your plan, imagine yourself presenting the information to others.
Practise what you would say and how you might answer questions about the plan.
Business plans are commonly written when you:

In almost of all of these workshops the topic of business planning comes up. We see plenty of plans that would be useful as “sell’ documents, however don’t give us any guidance on past successes AND failures. One Escalator broker gave the following advice on business planning and on value chain analysis:

“The business plan should be about the business, not the product. It is a work in progress and therefore should record milestones that have been set and those that were achieved or not achieved. It should focus on the exit strategy. All businesses tend to have 2-3 important key performance indicators that are key to the success or failure, for example clients through the door (retailer), keeping staffing costs at x% of the overhead (manufacturing facility). You should find out what they are and focus on these to drive the growth of the business and include them in your plan”. For a guide on developing an investor focused business plan please download the “Sample Business Plan”.

“It is important to complete a value chain analysis to understand who is involved and what value you add. Oftentimes a potential investor, strategic partner, or licensee is someone in that chain. To complete a value chain analysis simply look at your suppliers and what you get from them, look at what value you add to the product, and look to whom you sell”.

“The business plan should be about the business, not the product. It is a work in progress and therefore should record milestones that have been set and those that were achieved or not achieved. It should focus on the exit strategy. All businesses tend to have 2-3 important key performance indicators that are key to the success or failure, for example clients through the door (retailer), keeping staffing costs at x% of the overhead (manufacturing facility). You should find out what they are and focus on these to drive the growth of the business and include them in your plan”. For a guide on developing an investor focused business plan please download the “Sample Business Plan”.

“It is important to complete a value chain analysis to understand who is involved and what value you add. Oftentimes a potential investor, strategic partner, or licensee is someone in that chain. To complete a value chain analysis simply look at your suppliers and what you get from them, look at what value you add to the product, and look to whom you sell”. For further information on value chain analysis visit: http://www.quickmba.com/strategy/value-chain/

Download a general Business Plan Template