A business plan can be a very important tool to assist your business to succeed. It is useful for your accountant and bank, when you apply for money and above all helping you to keep on target and succeed in what you are doing.
Research shows that businesses with a business plan perform better than those without one. Studies have shown that businesses which had a written business plan were more successful and grew around 30% faster than those which didn’t.
The business plan can be quite simple or complex depending on your needs. There are plenty of sources of information and online planning tools and there are links to some of these at the bottom of this section.
I have also set out a business plan outline which I have used myself and to help some of my clients in the past. You could just copy the outline and paste it in your word processor. Do not be intimidated by this as it deliberately coves a lot of topics. If it is too complex at this stage, do not worry as you may just want to copy the headings and put in whatever information you feel is needed.
As mentioned above a useful link to an online tool includes:
Many banks have business planning templates available which you may prefer but we have put an outline of a typical plan below for your assistance.
There’s no one set way of writing a business plan. The secret is to keep it to brief and clear. Some some key questions about your business which will help you clarify your thinking are :
- What is your vision for your business?
- What to you need to do to achieve this vision?
- What financial and other resources will you need to achieve this?.
We welcome the opportunity to assist you to build your business and market online so please do not hesitate to contact us for a free consultation.
You can phone us on 07 85 3344 or email us using the simple contact form.
Typical business plan outline for your assistance
1. Your business profile
Before getting into the detail, start your business plan with a brief business profile. It will enable others (e.g. potential lenders or investors) to get an understanding of your business idea at a glance. It should contain:
- a brief explanation of your background, your skills and experience
- your business objectives, what you want to achieve
- a description of your business and the products and services you offer
- the make-up of your business: the number of employees, location, turnover, and profit margins.
2. Your competitive advantage
Why should your customers buy from you rather than your competitors? Is it your products? Your service? Your expertise? Your after-sales service? Your pricing? Or a combination of these factors? If you aren’t clear, your customers certainly won’t be.
3. Marketing and sales planning
An understanding of your market, how you’ll persuade them to buy your product or service, and how you’ll deliver it to them, is fundamental to success. You’ll need to think about:
a) Assessing your market:
- What is the current size of the market? Is it big enough to generate the revenue you need?
- What’s the nature of the market – is it relatively new, in a growth phase, mature or in decline? What’s the projected growth rate for the future?
- How much competition is there?
- Is the market profitable enough?
Places to go for help with your market research include:
- Statistics New Zealand’s Business Toolbox
- Trade or industry organisations
- Chambers of Commerce
- City or regional councils
- New Zealand Trade & Enterprise
- A mentor or someone with experience in your industry.
b) Your marketing channels:
Use your understanding of the market to decide the best way to reach your customers, and how often, with information and offers, e.g:
- Your website
- Search engine optimisation and search engine marketing
- Email marketing
- Social media marketing e.g Facebook and Twitter
- Advertising (TV, radio, print, online, mobile, social)
- Direct marketing (direct mail, email, SMS)
- Through influencers (e.g. lawyers, accountants, trade or professional organisations)
- Public relations, events and/or sponsorships
- or a combination of methods.
You’ll need to identify the cost and effectiveness of your preferred marketing approach.
c) Your distribution methods:
How will you get your products or services to your customers? Will they come to you (e.g. online sales retail outlets) or will you need to deliver to your customers (e.g. an online business)? For many businesses, it’s now a combination of both. Can you use joint ventures or alliances to distribute your products or services?
4. SWOT analysis
A SWOT analysis outlines your Strengths, Weaknesses, Opportunities and Threats. This helps you compare your business against your competitors in your market, and decide how you’ll build on your strengths and opportunities, and mitigate your weaknesses and threats.
Consider both internal factors (e.g. staffing) and external factors (e.g. market or demographic trends), and above all – be honest.
5. Financial forecasts
Your financial forecasts are one of the most important parts of your business plan. Why? Because if you don’t have a clear understanding of the revenue and profit you need to achieve to cover your operating expenses, you may be in for a nasty surprise. You should:
- calculate the start-up funds that your business will need, by creating a schedule of the assets and equipment you’ll need to get your business going
- calculate your break-even point, the point at which your sales revenue is sufficient to cover operating expenses (use our gross profit break-even calculator to help)
- complete a cash flow forecast so you can assess your working capital needs until the business breaks even.
- identify seasonal cash surpluses and shortfalls: most businesses have some degree of seasonality. Use your cash flow forecast to identify and manage cash surpluses and shortfalls throughout the year.
Your accountant can help you review your financial assumptions and ensure they’re realistic.
6. Turning your plan into action: Setting goals
You can turn your plan into action by setting specific goals for each aspect of your business – and importantly, by measuring your progress towards them. That way you’ll know if you’re on track or whether you need to adjust either your goals, or the assumptions behind them.
The key is to make your goals realistic. Shooting for the moon is great but if your goals are overly ambitious you’ll lose heart and motivation. Keep your objectives SMART, that is:
- Specific – If the goal is too general, you will lose focus
- Measurable – You can’t manage what you don’t measure
- Achievable – Large goals can seem daunting. Break bigger, more complex goals into smaller, more achievable chunks
- Relevant – Goals should relate to your overall business objectives
- Time framed – Without a deadline, your goal is just a dream that you have forever to achieve.
Here are some typical examples of SMART goals:
- financial objectives – to achieve turnover of $x and profits of $y by the end of the financial year
- strategic objectives – to gain two corporate customers by the end of the year
- operational objectives – to increase productivity by 20% by the end of the second year
- marketing objectives – to increase e-commerce sales by 10% by 1 June next year.
Once you’ve established your goals, write down who is responsible for achieving them.