Business planning helps you to :
- Take only calculated risks
- Make proper use of your available resources
- Understand how to achieve the lifestyle you want
Most businesses generally plan to some extent, but quite often the planning is very informal and ill defined. It's much better to set out your plan in writing, even just roughly, because this makes you define your ideas more clearly.
What's needed to create a workable plan
Before you start your plan you should consider what information you'll need to assemble. For example you'll definitely need accountancy figures and marketing data. Once you've got together some basic information you can make a start.
A basic business plan will always include some core areas and yours should be no different.
The key steps:
- Define your business.
- Identify the key features of your business.
- Analyse its strengths and weaknesses
- Consider opportunities open to you, and the challenges you face
- Identify potential customers
- Identify your niche
- Identify any training requirements
- Establish a pricing strategy and the reasons for it
- Establish your fixed and variable costs
- Work out your marketing strategy - what are the best ways to grow your business
- Determine how you will attract potential customers
- Establish if you are affected by health and safety legislation
- Calculate the financial resources you require with cash flow forecasts
- Think about how you can respond to a new competitor in your target market
- If you business is seasonal make allowances for this
To achieve the best results from your planning you will need to monitor your actual performance against your plan. This helps provide a warning if your plan is off course.
You should aim to regularly re-visit and update your plan as your business grows. By making your business plan a living document you can look critically at your business on a recurring basis.
The most common errors
- Many business plans are far too optimistic, especially regarding predicted sales, often massively overestimating the size of the market.
- Many also ignore the fact that there are other businesses competing for the same customers.
- Plans tend to concentrate heavily on doing something new, when what may be really needed is to find a better way of doing what is being done now.
- What happens if you're ill or need a holiday? Often completely overlooked in the plan.
- Profit or turnover - there is an old saying that turnover is vanity, but profit is sanity. If expansion is planned, it should result in increased profits, not just sales.
We can help you to develop a plan specifically for your business.
Please let us know if you would like help in this area.