6 Tips For Preparing Your Business Plan
Every business is unique and therefore your business plan must be structured to suit the needs of your business. There is no right or wrong way to structure a business plan—each differs in presentation and emphasis. The particular requirements of your business should be taken into account, as well as the purpose or use for which the plan is being prepared.
One of the most common and also most critical needs for a business plan is applying for finance for your business. A great, detailed business plan is an essential document to ensure you can prove to lenders and investors why they should lend you money and you will be able to pay them back. Whether you’re new to business or have been operating for years, lenders and investors will only risk their time and money if they are convinced your business will be successful and profitable.
A Time for Reflection and a Time for Planning
Writing and researching for your business plan gives you the chance to succeed in six critical areas:
- 1. Learn about your industry, market and competitors
- 2. Write down exactly where you are in the market and where you want to be
- 3. Identify challenges you may come across and work out strategies to avoid or overcome them
- 4. Understand your business finances, including managing cash-flow and determining your break-even point
- 5. Set specific goals, timeframes for achieving them and how you’ll measure performance
- 6. Make sound business decisions that focus your activities, maximise your resources and give you a competitive edge.
If you are preparing a business plan for a loan, it is recommended that you check with your financial institution if they have particular requirements. Most financial institutions will be able to provide a template that suits their needs.
Developing a business plan takes time. Rather than thinking you can or should write your plan in a single sitting, consider it a process that you should undertake over a period of time, usually months. This will give you the opportunity to develop your ideas and strategies and to identify and resolve problems.
The Process Will Take Time – Be Prepared
As you put your business plan together, keep in mind the following tips:
- Determine the objectives of your plan
- Decide what information must be presented in the plan, e.g. if finance is required, include sufficient information to enable the financier to make an informed decision
- Determine in advance to whom you will be presenting the plan – knowing the reader(s) will help you decide on the detail required, its length and emphasis
- Use tables, charts and graphs to present data where possible
- Make a good first impression – incorrect spelling, grammar, punctuation, numbers that do not add up and a poorly organised plan all detract from the impact of the document
- Keep paragraphs and sentences short
- Avoid jargon – don’t use language that only an expert could understand
- Don’t make vague or unsubstantiated claims or statements
- Arrange to have your business plan bound in a business-like (not ‘slick’) presentation
- Include an executive summary up-front but write it last
- Be succinct. Quantity does not equal quality – a well-written plan should say it all in 20 to 30 pages maximum
- Use consultants where required to assist you to prepare the plan but not prepare it for you – it should always be your plan, you should understand it fully and be committed to it
Whether it’s fair or not—a recipient of your business plan will form a view of you and your company. It won’t matter if they would get a great impression of your business after meeting with you. Investors and lenders want to know you have a thought about what is important and the risks your business will be facing and how you would respond. Therefore, investing time and focus in creating a business plan is one of the most valuable activities for the launching of your business you can undertake.
Creating a well-structured business plan will give you direction and help your business become a success. A business plan provides a roadmap for your business’s future and is essential to its profitability and longevity.
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