Why a Business Plan is Essential and how to write it

Your business plan describes what your company does and what you want to accomplish. It describes the market opportunity, what distinguishes your business, and how you plan to make it a success.

What is the aim of writing a business plan?

• Writing a business plan forces you to reflect on what you're doing;
• The strategy and action plan for the next one to three years, or sometimes longer, are outlined in the plan;
• You set specific goals and prepare how to accomplish them as part of the process;
• Writing a business plan allows you to concentrate your thoughts and improve them. Priorities have been determined. Non-priorities are discarded, saving time;
• Putting the strategy in writing makes it easier to identify any holes where you need to do more;
• Once written, the strategy serves as a barometer for the company's success;
• You will continue to develop a successful, dedicated team by including the workers in the entire planning phase.

• If you want to raise money from a bank or from outside investors, you must have a business plan;
• A good strategy will assist you in attracting new senior management as well as business partners such as distributors and agents;
• You should tailor your strategy to your intended audience. For example, you might want to use the strategy to 'sell' the company to your bank manager or investors;
• Inquire with the intended recipient whether there are any particular problems they want the plan to fix or whether there is a template you can use.

Wherever possible, base your business strategy on detailed details. However, do not include all of the details in the plan. Leave the finer points to organisational or marketing strategies.

• Keep the proposal as brief as possible;
• Concentrate on what the reader needs;
• Remove any waffles;
• Make certain that there are no spelling errors;
• Detailed strategic plans are often abandoned because they are difficult to implement on an ongoing basis.

Include any additional details you need in an appendix.
For instance, you may want to add:

• financial projections and assumptions;
• data from market analysis to back up what you claim;
• main staff curriculum vitae (essential if you are seeking outside funding);
• material documentation or technical requirements.

Your business strategy should be grounded in facts, otherwise, it will be counterproductive.

• Overly optimistic projections will result in increased overheads, a cash flow problem, and drastic cost-cutting;
• And if you're selling the company to a third party, be rational. Overly ambitious strategies that disregard vulnerabilities or risks will be seen through by financiers, corporate associates, and workers. Management's reputation may be jeopardised.

Make the strategy competent.

• Cover it with a cloth;
• Have a table of contents with page and section numbers;
• Begin by writing an executive summary. This summarises the main points, beginning with the business plan's intent;
• If charts are useful, use them.

Examine your business strategy.

• Examine the proposal from the perspective of your intended reader. Consider the impact the proposal would have on your bank manager, for example;
• Check to see if the proposal is feasible. Be certain that it contains facts to back up what you claim (perhaps in an appendix) or that you can provide evidence if necessary;
• Make sure you evaluate the risks. What could go wrong (for example, if your main supplier goes bankrupt or you lose a key customer), and what will you do about it;
• Pay attention to the executive summary. People sometimes make rash decisions based on this. They just read the rest of the plan after that to confirm their decision;
• Show the proposal to your mates and professional advisors for feedback. What bits did they find confusing or unconvincing?

Persona Finance will assist you if you need financial advice for your company. Persona Finance can be reached at [enquiries@personafinance.co.uk].