Writing a business plan

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Writing a business plan

WHY BUSINESS PLAN IS REQUIRED FOR YOU

Serial entrepreneur and author Creel Price advocates business plans as a way for business owners to give structure to their thinking.

“Certainly in the financial modelling side, being forced to do a plan means that you start to do the maths and the effort that you are forced to put in up front forces you to be a lot clearer,” he says.

“If you are going for investors it is crucial and it helps you communicate with staff,” Price says. He says a business plan helps staff feel involved in your business and they can let you know whether your plan is achievable.

“Particularly the typical entrepreneur tends to just assume a lot of stuff, they can envisage things without realising how hard it is to make it happen,” Price says.

Kevin Dwyer, managing director at business consultancy the Change Factory, says without a business plan you are “flying blind”. “If you are a one man band maybe you don’t need a business plan but if you become more than one person you need a plan,” Dwyer says.

“It makes you think what your business is about. Quite a lot of small businesses don’t know what their business is about, who their customers are and how they can make more money out of those customers.”

Dwyer says business plans are not just for startups and are even more important for established businesses. “When you are a startup you are usually looking at a nice neat picture of your market, but the world is never like that and it is only once you start going along that you understand the issues you never thought of as a startup,” he says.

WHY BUSINESS PLAN IS REQUIRED FOR YOU

Now you’re convinced you need a business plan, how do you actually write a useful plan?

There are a few guidelines to keep in mind and the first is that it should be short and sweet. Price recommends keeping your business plan to the length of “a double sided one pager” but says “to get to that page there’s a huge amount of work that goes in”.

“You don’t want a door stop, you want a living and breathing document that people use,” he says. Dwyer recommends starting with your financials if you have been in business for a while.

“Look at your profit over the last few years and sales,” he says. “Get an idea of where you are at, where your major customers are from, any trends in the type of work you have been doing over the last few years.”

Dwyer then advocates spending a day with your staff “doing a bit of blue sky thinking”.

This could involve talking about new products and changing the structure of your business. Most importantly, Dwyer says you shouldn’t think about all the reasons why you can’t do something.

This could involve talking about new products and changing the structure of your business. Most importantly, Dwyer says you shouldn’t think about all the reasons why you can’t do something.

“Then come back in three months’ time and think about what money is required, what resources are required and put together a budget and plan for the next 12 months,” Dwyer says.

This is your business plan and if you are looking at expanding your business you might want to look at other performance indicators like your ability to recruit the right people.

This is your business plan and if you are looking at expanding your business you might want to look at other performance indicators like your ability to recruit the right people.




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