Do we still need business plans?
Time is of the essence in business.
As the old saying goes, “time is money.” In business, this couldn’t be truer.
Without having a plan for your business, daily activities are likely to be disorganised and time is wasted. Creating a well thought-out plan will help you manage your business more effectively. For every new business, a business plan is integral.
Business plans can range in length, style and content, but the fundamentals must be addressed. A business plan done right will map out the future of your business.
A business plan is a document that describes your business, its objectives, strategies, target market and financial forecasts.
Let’s have a look at why there’s still a place for business plans in 2014.
- Applying for funding. If you plan to approach a bank for a loan, apply for a small business grant, pitch your idea to investors and sponsors or go into partnership, a business plan is necessary. Potential stakeholders want to see your business idea laid out clearly with reliable data to support the likelihood of success.
- Helping make decisions. There are parts of a business plan that you will be unable to complete if you are still thinking through your idea. Business plans force you to eliminate the grey area because you have to be extremely specific. A business plan will help refine your idea early in.
- Helps uncover flaws. Many businesses are started out of a love for something. A business plan forces an idea to be fleshed out and flaws are typically uncovered earlier than later. Identifying gaps early in the process can help you test your idea and move towards a stronger business.
- Helps develop new ideas. A business plan doesn’t have to be a long, structured document; an effective business plan should in fact be the opposite. Think of a business plan as a dynamic tool to help think creatively and the process will be more useful and enjoyable.
- Creates a tangible action plan. A business plan can be used as a tool to outline the action steps to take to get the business off the ground. While this can be done without a business plan, it is most certainly easier to do with a well thought out plan in your hands.
A business plan: the important parts
Many people think business plans have to be a long, drawn out 40-page document. It doesn’t have to be like this. If you can incorporate your market, identify potential customers, assemble a team and devise a business model in 5 pages then there’s no need to go on.
Whether your business plan is long or short, it should contain the same basic elements. Typically it should include an executive summary, company objective, market analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team and financial plan.
10 tips for writing a business plan
There are specific things you need to keep in mind while preparing your business plan. Here are 10 tips to get you started.
- Don’t wait for perfect.
Your business plan is an organic document; there is no such thing as perfect. Focus on covering the most important points that will help you get started and overcome the biggest obstacles.
- Don’t skip the hard parts.
A business plan should discuss the analysis, the action plan and the projections. There will be difficult parts you will want to skip but it’s important to focus on all three.
- Do your research first.
Spend the time simply researching and consuming. Don’t feel like you’re wasting your time. You can learn a lot by understanding your customers, competitors and what’s currently out there.
- Learn from experience.
After you start your company, don’t be afraid to talk to your customers. Getting as much information as possible will help refine your business idea.
- Be specific.
Be as clear as possible who your customers are, what problem you are solving and how you will solve it.
- Understand your industry.
You need to know how the industry you’re entering into works.
- Know who else is in your industry.
Understand the other players in your field. That way, you can position your company in a way that serves a purpose the others don’t.
- Be realistic in your action plan.
Be clear about what will be done, who will do it, how much it will cost and how you will connect with your customers. The clearer you can be the better.
- Include the wins.
Include any successful results you have including paying customers, subscribers and growth.
- Update your business plan regularly.
Your business is constantly evolving so it’s important to revisit it yearly to refine it. Your business plan should grow as your business does.
A little planning goes a long way
When starting out in business it’s important to know if there’s a market for your products or services. You need to know the financial potential and costs involved to make a profit. You need to have a good idea of how you’re going to deliver those products or services and if there are any legal restrictions or requirements in place for your idea.
A business plan whether 40 pages or 5 is imperative for any new business. Michael Bowman Accounting can work with you to create a blueprint for your new business or assist in refining an old business plan.
How we can help
We work closely with our clients throughout the year providing a valuable support system for business decision-making. Our affordable service is suitable for start-ups who need assistance but don’t have much in the way of profits. At the same time, our service is useful for busy business owners who require quick professional advice.
Along with your business plan, we can help you with:
- Business structuring & restructuring
- Strategic planning •
- Growth strategies •
- Financial budgeting •
- Financial account analysis •
- Succession planning •
- Tax planning
We have helped our clients introduce new employees, maximise profit for the month, upgrade office spaces, increase superannuation, lower tax payable and introduce new products or services. To implement all of these business milestones successfully, it all starts with a well-constructed business plan.