A great business plan: an essential tool for small business that focuses your working energy and helps you achieve your goals. So where do you start when making a business plan?
Quick takeaways if you’re in a hurry
- A robust business plan can keep your business on track and help you to steer it towards your long term goals
- Your business plan is a document for you, and for everyone who has an interest in your business. Make sure it makes sense and get it checked for spelling mistakes or typos
- An effective business plan needs to be referred to regularly and kept up to date. Integrate your key performance indicators with your business plan targets to align your company goals.
Read on: Making a business plan that will be effective
(Estimated reading time: 4 minutes)
You don’t get in the car and start driving without knowing where you are going, and running a business is the same. It’s important to be aware of where you’re business is heading so you know the decisions and direction that you need in order to achieve your objectives.
You more than likely have a lot of ideas you’d like to share, but popular opinion says your business plan should focus on four things:
- The chosen direction for your business. Define what your business is about and make sure you create activities and objectives that stay true to this direction.
- Objectives for the next three to five years. You know where you want to get to and it’s important to work out what that means for the next three to five years. Without defining these objectives it’s too easy to get side-tracked.
- Your day-to-day operations and financials. Setting clear plans and targets for the operations of your business ensure that you set up an infrastructure that will support your short and long term goals. Financial targets and reporting are essential to track progress.
- The steps that will allow you to achieve your goals. A business plan will ensure that everything you work on and invest in today is aligned with your long term goals.
The internet is a great tool for designing your business plan. Have a look for the best business plan template for you – there are lots of different structures to choose from. Once you’ve chosen a favourite, start capturing the contents of your plan by noting down ideas and key points under each heading. Then sort them into a logical order before writing them properly into the plan.
Who your plan is for
Your business plan will be read by your staff; potential investors and lenders; potential business partners; buyers; and probably many others. So with all these audiences in mind it’s good to keep language as simple as possible.
Avoid any unnecessary information or words and try to write in bullets or use visuals if you can; it just makes it easier to read. A good tip is to keep numbers realistic and stay conservative: it’s usually better to under-estimate and over-deliver.
Critique for success
Once your business plan is complete it’s a good idea to have it reviewed by your mentors and advisers. A business plan needs a few sets of eyes and a thorough critique to ensure it is robust in its objectives and considered in the path to achieve those.
Another good idea is to get someone to read it through and spell check it too. It’s easy to have small errors in your plan but because this document will be shared with an important audience, it’s important to get it 100 percent correct. Investments or funding and typos don’t usually go hand in hand.
Evolve and grow
Your business plan is a living document, don’t file it in the bottom draw to gather dust – keep it front and centre. If you have a team then you can use your business plan to underpin your key performance indicators. Short term business plan goals should align with individual targets. This simply makes smart business sense: if your staff do their jobs well, your business moves closer to its goals.
Your business plan will grow and change over the lifetime of your business. To make it really effective, refer back to regularly. To make it relevant, keep it up to date. But most importantly if you start writing it today you need never look back – only forward.
Invoice Finance, Cashflow Solutions and Business Loans
Fifo Capital are experts in cashflow solutions for small to medium business. Find out more about invoice finance and our fast business loans here: