Often new and existing clients ask me this question and my answer is always the same… Yes! Any business where money, time and energy are spent in the pursuit of a profit needs and will benefit from a business plan. Ask any successful business today what keeps them ‘on track’ and I think the majority would answer, a robust and specific business plan…
Of course, start-ups are regularly advised to write business plans but even as an established company, you can benefit from writing or updating an existing business plan, especially in circumstances such as a change of management structure, a new product or service launch, or raising additional finance and/or investment. Often an existing business plan might simply have become outdated due to business growth.
Taking this back to basics, a business plan can take on a number of shapes, sizes and designs and will often change and adapt over time. We can then use this plan for a range of purposes, such as convincing investors to back the business, to selling the business concept to shareholders, but the main purpose will be to set out your strategy and goals including the details of how the business will look to achieve these.
There is distinction between business plans as often they reflect and follow the thoughts and desires of the specific business owners that write them, despite this however, all plans can be broadly portioned into 3 sections; concepts, markets, and financials.
Within the concepts section, we will write around the areas in which the business operates, our organisational structure will be outlined, and we include information around what product and/or services can and are provided. The marketplace section will detail the results of any market research completed, including information about customers, locations, customer motivations and analysis around competitors. Finally, the financials! These set out cashflow, projections, profit and loss forecasts, a break-even analysis, historical accounting reports, and any other relevant financial information.
I often remind those I work with; A business plan doesn’t need to be comprehensive, indeed business plans come in all shapes and sizes from brief paragraphs jotted down on a single piece of paper, to polished documents extending 100 pages or more. You can determine the correct length and format based on the purpose you have for writing the plan… A few paragraphs on a piece of paper may be sufficient if the goal is to organise a few scattered ideas into a working strategy but if trying to raise investment a well-presented, comprehensive document with plenty of financials will look and achieve far better results.
A mini-plan containing fewer than 10 pages can be used when investigating a new product or service on potential business partners or minor investors, as this will cover all areas of a standard business plan, especially the financials, but in less depth. However, when looking to promote your business plan to those outside the business, potential investors, bank account managers, shareholders and so on, a presentation plan is the broadest option including additional documents such as executive CVs, product photography, and detailed financial reporting. Alternatively, for internal use, a working plan can be chosen, containing in-depth information on all key areas but this plan will be less concerned with presentation, and can contain business specific terminology and technical details, which should be avoided in a more in-depth, presentation plan.