What is a Business Plan? A business plan is a roadmap of where you want to take your business. It will summarise both the operational and financial goals of the company.
Depending on why you need a plan will depend on how much detail you use. For a new startup, you include everything from competition to full costings and projections. If you are using it for internal purposes, you may not need to go into as much detail.
Purpose of a Business Plan
There are several purposes of a business plan, including:
- Startup – To see if the business idea is viable. You might start the plan and realise there is not enough market share available or even that there is a broader market.
- Investors – Potential investors will require a business plan before they invest. They may also complete full due diligence.
- Loans and Overdrafts – Banks will require a report to agree to overdrafts and loans.
- Internal reports – Even if you do not need a plan for the above reasons, it is always worth having one to plan the future of the business.
Why is a business plan important?
A business plan sets out goals for the company. Without these goals, you may not know where your business is going or if the finances are correct.
I have known businesses to fail as the financial plan is not in place, and additional expenses meant the company was not viable. Many companies fail in the first year for not spending time on their plan.
Business Plan Consultants
Some people can help you write a plan, but in the end, the best person who can write a business plan is yourself, as you know the products, market place and pricing. If you need help with the financial forecasts, it is worth getting an accountant involved.
Some consultants can work with you to both improve the reports and ensure everything is included. They will work with you to ensure that the figures are correct and also complete research for you. It will add to the startup costs, but in the long run, it might be worth the investment.
It might be that you have a great business idea, but have no idea how to turn the idea into a viable business.
How to write a Business Plan
It is essential to get all the information into your plan. How to write a business plan describes what you need to include in your plan. It should consist of a summary of what your business does, how the company has developed and where you want it to go in the future. It should include a clear strategy for improving your existing sales and how you plan to achieve the growth you want.
Free Business Plan Template
There is a free business plan template in Word available on the Princes Trust website. They also have an enterprise program, which helps you to find funding mentors and get you started with your business idea.
What is a Business Plan? – Top Tips
Know Your Market – An essential part of any business is to know the competition and the service or product that you are selling. You also need to prove that there is a market that you can sell to, including age, gender and location.
Be Concise – Include as much detail as possible, but do not waffle too much and lose the readers attention. Make sure you include a summary so that they can glance over the main details.
Know Your Finances – Finances are an essential part of a business plan. You must know your finances and do not overestimate sales or expenses as it can put off potential investors. It is worth keeping your forecasts up to date, as the finances of the business may change.
Language Skills – A well-written business plan makes a good impression on the reader. Make sure your content does not include any basic mistakes. Get other people to read it through and if you need it to ask a proofreader to review it.
Be Creative – If you can be creative in the plan, show the reader you know what you are talking about, but also make it stand out from others.
Follow your Business Plan – Once you have created a plan, you must follow it. Put procedures in place and review your plan at regular intervals. If the business changes, then review the plan and make any adjustments.
If you are still wondering what is a business plan? Do some more research, as it is one of the most important parts of starting a business.
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