If there’s one thing your business needs when you first start up – or at any stage – it’s a plan. After all, if you don’t know what you want to achieve and what timeframe to do it in, it’s hard to make much real progress.
Here are six steps you’ll need to follow to create an effective business plan that will help you assure investors, win funding, and achieve your business goals.
1) Understand your business
Before you put pen to paper, it’s important to know your business inside and out. Having a good understanding of your business’s strengths and weaknesses will not only help you to set realistic goals – it’ll also show potential investors that their money will be in capable hands.
SWOT analysis (strengths, weaknesses, opportunities and threats) is a useful tool for identifying external and internal factors affecting your business, and may help you gain these insights. Furthermore, if you run an established business, looking at your past performance can be useful, too.
Once you understand your business and how it works, you’ll be much better prepared to write the executive summary of your business plan. This vital element will hook in investors and persuade them that your business is worth investing in.
2) Scope out the competition
If you’re hoping to attract investors with your business plan, you’ll also need to explain what sets you apart from your competition.
Ask yourself: what’s your real unique selling point? Why would a customer choose you, instead of your competition?
By looking at how other businesses in the industry perform, you’ll find it easier to set realistic goals and make plans for your business’s future. This kind of research can be especially useful if you’re a startup entrepreneur.
You should look at a number of different resources, ranging from direct interviews with fellow business owners (if you can get them!) and industry experts to data on your competitors’ financial performance and industry trends.
3) Crunch the numbers
Anyone looking at your business plan will want to know how the numbers add up before they’ll consider investing. You’ll need to produce a wide range of financial forecasts, including a long-term budget, a cashflow forecast and projected turnover and profits. You should also outline how much money you need to finance your goals.
It’s important to be as accurate as possible in your calculations to ensure you receive the funding you need and meet your goals within the right time frame.
4) Set your business goals
Now we’re getting to the essence of your business plan – your goals and objectives. What is it that you want to achieve? What is your vision for the future?
Thinking through your short and long term goals carefully will give you a good idea of the actions you need to take to get your business where it needs to go.
You’ll need to make sure your goals are realistic and worth your time and effort. Setting overly optimistic targets won’t just put off investors – it may also set your business up for failure in the long run.
5) Build your strategy
Once you’ve set your goals, you’ll need to develop a strategy that is sustainable long term. What actions do you need to take to meet your targets? How much money do you need to finance your business?
Pulling from tried and true strategies that have proved successful in your industry can be helpful, or you may choose to develop a new method to meet your objectives.
It’s also important to think about how you’ll monitor your performance going forward. For example, setting key performance indicators (KPIs) for your business will make it easier to keep an eye on your progress, as well as show investors that you know how to stay on track.
6) Draw up your plan
Once you have all the information you need, you’ll be able to start writing your plan. If you’re unsure how to lay out the document, you can download business plan templates from the Government website.
You’ll need to organise all the information carefully and make sure you cite sources in your plan – but it’s also important to keep it concise. An overly long document will put off investors, so you should try to keep it straight to the point.
Drawing up a business plan can be difficult and time consuming, particularly if you’re a first time entrepreneur. Working with expert financial advisors can help take the stress out of the business planning process, as well as help you ensure that the numbers add up.
Talk to us to find out how we can help you draw up a business plan that gets you where you want to go.