Hello, I’m Naomi Burgess, and I’m going to tell you about business plans and how they can serve as the cornerstone of your business.
Define business plan
For starters, what is a business plan? Essentially, it’s a plan of plans – a way to structure any future plans that you might have for your business, both short- and long-term. Of course, it’s unlikely that you’re going to stick to it 100% as you run your business – the economy and the markets are, after all, unpredictable – but it’s nevertheless a great idea to have a business plan, for the reasons outlined below.
Business plan’s purpose
A business plan also functions as a kind of contract between you and any investor or lender you approach – a document that serves as the face of your business. This is the first impression your potential providers of external finance are going to have of you, and in 90% of business plans, it’s also the last. So what can you do in order to end up in the smaller pile?
Like any document of the kind, a business plan has to be structured and developed properly. There’s no use in writing a plan by copy and pasting the template clauses found on the Internet – most investors and lenders see heaps of such plans and can spot them easily from a mile away.
Business Plan’s structure
A business plan must be written in a clear, concise and engaging way that would make it stand out from hundreds of business plans that cross the lender’s desk every day. A front-page summary is a must – after all, how else is the reader supposed to know right away what kind of business you’re operating and what you need? People prefer to know right away what they’re going to spend the next few hours reading about, and if they don’t, they’re unlikely to give such a plan another thought. To make the document even easier to navigate, a contents page should also be included.
Write a great content
However, no matter how glossy and nice your plan looks, the investors are after the content, not the package. Remember to give a detailed overview of, and insight into, the three main topics of interest – business management, product (or service) marketing, and financing. To give you an example, a business plan can include budget forecasts, operations structure, managerial structure, and a schedule of realizing the short- and long-term plans outlined, to name a few. And don’t forget about the appendices, which would be different for each industry – for example, technical specifications of machinery would be included in a business plan related to an engineering company, whereas a planned publishing agency would likely include a list of proposed client genres. Market research documentation is also usually attached to business plans, as well as various other data in various forms.
Target the main idea
No matter what appendices you’re intending to include, you must always keep their primary purpose in mind – they support, confirm or further elaborate on the points you make in the main body of your business plan. Do make sure to link to them as appropriate in the text – nobody likes spending their time flipping through pages, no matter how nice they look.
Writing a great business plan takes quite a bit of time but if it impresses a potential lending organisation and helps you obtain external finance, that time would be well-spent. Keep in mind that this tool would also be an excellent planning mechanism – after all, it is called a “business PLAN” for a reason!