What is a business plan?
A business plan helps you to set goals and targets for your business along with helping you to identify any strengths, weaknesses, opportunities and threats that the business has. Business plans aren't just a paper exercise- they genuinely help the business (and you) to grow and scale up.
Business plans help you to turn an idea into a business and it makes you think through all of the different aspects of your business to plan how everything will work and how it will grow. Business planning can take weeks to do properly.
Whether you're thinking about setting up a new business or you're just looking to evaluate your current one, then a business plan is a crucial tool needed to get things right.
What are business plans used for?
Business plans are usually used when starting up a new business to evaluate whether or not a new business is worthwhile. Business plans are often used by lenders, investors and awarding bodies (such as the Prince's Trust) to decide whether or not to lend a business money- most of them won't lend money or grant funds without a solid business plan being in place.
Business Planning is also an invaluable tool for established businesses. The economy changes all the time and a good business owner knows that they need to change with it. Without having a business plan, targets and goals, actual milestones that are achieved are unquantifiable as you've nothing to measure them against.
Business plans also help with business financial planning. Most established businesses will alter their plans at least annually or if a major event occurs that could drastically alter their current business plan (think Covd-19).
What should I include in my business plan?
The best business plans aren't necessarily long and complex and they should explain the most important information. Business plans are broken down into three key sections (usually with a few sub-sections added in there):
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What do you want to achieve?
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How will you achieve it?
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What do you need to do along the way to get where you want to be?
Those three points all seem pretty similar, and that's because they are. They're all interlinked and they should all follow "SMART" objectives:
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Specific (what do you want to achieve?)
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Measurable (how will you achieve it?)
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Attainable (a good business plan has to be challenging, but also attainable)
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Relevant (your objectives need to be relevant to your business)
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Time-Bound (a business plan is usually broken down into short, medium and long-term goals e.g. the next 12 months, 1-3 years, 3-5 years)
A good business plan will cover off the three key sections and follow the SMART objectives. Your business plan can have several objectives and different methods of measurement and all the objectives may not have the same "completion date" (but they'll all have one and that's the key point).
When writing your business plan, you should also consider any personal expenditure- what are you going to live off when starting your new business? Can you afford time off work to start it? Do you have money put to the side to invest in your own business? If so, how long can the business last on your investment?
To download a copy of our business plan template, click here.