A business plan is a summary and appraisal of your business concept. It is the written result of the planning process.
A business plan shows the likelihood of success of the business and your ability to make it work. It affords the means to work through all aspects of a business and to scrutinise the consequences of a variety of strategies relative to marketing, management, finance and human resources.
It is a management instrument to provide direction to you as the business owner. If you are starting a business, the process of preparing and writing a business plan provides a great opportunity to test your motivation and commitment.
Why complete a business plan?
A business plan enables you to take an objective look at your business, identifying areas of strength and weakness and indicates requirements and problems that might otherwise be unnoticed. If your business enterprise is at best, marginal, the business plan will demonstrate to you why.
Having a business plan that is well prepared also provides a foundation for monitoring the progress of the business.
Lastly, if you require external financing, your business plan will provide the information needed to evaluate your business enterprise. A carefully prepared business plan routinely becomes a complete financial proposal that will in most cases meet the requirements of most investors and lenders.
Understand the business you are in.
Most business owners spend a considerable amount of time pondering the future of their business, but not all actually complete any formal business planning. What the planning provides is a measure of structure and a focal point, allows one to analyse alternative strategies that may have been missing on first thought.
There are a number of ways and formats including software packages that assist in preparation of a business plan. The following list is just a guide to a standard business plan layout; we hope it is useful to you.
1. Front cover
2. Statement of purpose
3. Summary
4. Table of contents
5. The business
* Business objectives
* Name, address, contact details and ABN
* Business activity, commencement date, commencement capital and business structure
* Competitive advantage
* Owners’ profiles
* Major clients
* Licences and registrations
* Business advisors
* Current performance
6. Industry analysis
* ANZSIC category, political/economic, social, technological, industry and competition
* Key success factors
7. Product and services
* Product range analysis
* Competitor analysis
* SWOT analysis
8. Marketing plan
* Target market
* Marketing objectives
* Marketing strategy – product, price, promotion and place
9. Operational strategy
* Location and premises
* Plant and equipment
* Inventory
* Human resources
* Environmental strategy
10. Financial strategy
* Financial objectives
* Capital structure
* Statements of financial performance and financial position (Income statement and balance sheet)
* Cashflow forecasts
* Sales and collections from debtors forecasts
* Purchases and payments to creditors forecasts
* Breakeven analysis
11. Appendices
* Financial statements
* Legal documents, leases, contacts, letters of intent
* Research documents, patents, trademarks
For further information on Business Planning, please visit the Business section of Income Resource Club.
Steven is the co-founder of the Income Resource Club, a business portal with hundreds of resources on business, property and trading.
Tags: Business, Crucial, Guide, Planning, Stage, This
