What goes into a business plan?
Why do you need a business plan? And what needs to go into it? Here's some practical advice.
told "You need
a business plan". It may some consultant trying to sell you their
services (yes, we can help you!), or a bank from whom you are trying to
borrow money - or just someone trying to help you. In another article
in the archive, we point out The Power
of Planning Ahead, showing the benefits of having a clear idea of
where you are heading.
But what should
be in a business plan? Here's a quick check list to help you:
Seems like a
lot of work, eh? Well it is, and that's why some businesses seek outside
help when putting a business plan together.
personal, business, consequences
history (if already established), description, ownership, key
experience, responsibilities, details, missing skills and how
they are to be obtained
description (including photographs if possible), tests (including
method of production), cost calculations, advantages - different / better
Size, major customers, major competitors (including your advantages
over them), market research (predicted share of the market)
plan: marketing strategy, pricing (calculations / competitiveness),
method of sale, advertising (method / cost), average order size
who, availability, quality, lead times, credit
numbers, skills, training
resources: premises (location / availability / adequacy / cost),
plant, equipment and vehicles (availability / cost / lead time / lease
and cash forecasts: profit forecasts (for up to 3 years), cash
flow forecasts (for up to 3 years), balance sheets (at yearly accounting
dates), clearly stated assumptions, risks attached, break-even analysis
(survival, should the business under-achieve)
requirements (fixed assets / working capital), anticipated
repayment schedule, sources
as you wouldn't put up a building unless you were sure that the foundations
were secure, so a detailed, and well thought-out business plan (maintained
at regular intervals) will help to ensure the survival of your business
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