Writing a business plan
Perhaps the most important aspect of starting up a new business is to write a detailed, accurate and effective business plan. A water-tight business plan will give you the direction and focus you need to channel your energies more effectively toward the fulfilment of your business goals. Writing a business plan requires both extensive financial knowledge and strategic planning skills.
Tips on writing a business plan
Executive summary – describe the legal entity and ownership structure.
- Although it appears first, write this section last. Keep it as brief as possible and summarise the key elements of your business plan
- Include things like the location and history of the business; facilities and equipment; business structure; insurances; and an overview of start-up costs.
Product overview – describe the products or services you offer.
- Explain the product/service in detail and try to identify your competitive advantage
- Outline the costs in delivering your product/service.
Industry and market – analyse market segments.
- Do your homework on competitors and the market you’re hoping to reach
- Outline what the business environment will be like in 5, 10, 15 years time.
Company strategy – detail the direction your business will take.
- Identify your ideal growth rate and direction, then outline the marketing and operational strategies you’ll be using to make it happen
- Keep your growth rate realistic and use actual numbers, dollars and timeframes.
Marketing plan – explain who will buy your product and why.
- Give details of your pricing strategy, how you intend to communicate with your target customers and what costs are involved
- Consider whether it’s worth getting your business online.
Financial plan – prepare financials covering short and long-term projections.
- Include profit and loss; cashflow; balance sheet; sales forecasts; assumptions; annual income and expenses
- A detailed financial plan will help with your business loan application. Provide details of how you’ll repay a business loan and what assets you intend to use as security.
SWOT analysis – define your strengths, weaknesses, opportunities, threats.
- This helps paint a complete picture of your business and what you need to focus on
- Don’t ignore the weaknesses and threats. Try to put a plan together that deals with these issues.
Exit strategy – outline your succession plan.
- Think about how and when to exit your business. Do you want to pass your business on to family, build it up to sell on, or use it as part of your retirement plan?
- Get advice from your lawyer or accountant to help define your exit strategy.