Top Ten Tips for Writing Successful Business Plans
The blank sheet of paper staring you in the face is common but don't put the task off too long. With ideas in your head, especially a profitable future predicted, why not start writing your plan today? Here are our top 10 tips for writing successful business plans from start to finish.
1: Write it For Yourself
In essence, your plan is a map of your journey from start-up to profitability. Even if your bank has asked for a plan write it for yourself in the first instance. Writing because you have been told to won't help in the longer term.
If your document is concise, it'll help you understand exactly how to become a success. You can use it each month to check on your status of being successful.
2: Understand the Market
Research can be difficult to obtain, but it's out there. Knowing if your market is expanding or contracting is important for you and your investors. Check online for market research reports for your industry.
You'll need to know the total value, the profitability, the volume of customers and competitors. A new Pizza takeaway may sound like a great idea but is that what people want?
You could easily stand on the street asking people passing by if they would buy from you. Local businesses require local knowledge so why not try council offices and Chambers of Commerce to help you?
3: Know Your Competitors
A new entrant to any market could change existing businesses attitudes towards their customers. You don't want to start a price war, but competitors may start to offer additional discounts for their products.
They're likely to have an existing loyal customer base and finances from years of being in business. Understand what they may change if you start nearby.
4: The First Year is Critical
Place most of your attention to the detail of your first 12 months of trading. Most businesses fail in their first year so if you can turn a profit further years should be easier. Therefore, when forecasting your numbers, pay less attention to the outlying years.
Just forecast for the full 12 months rather than monthly data saving you valuable time in the planning stage.
5: Pay Attention to the Numbers
In overall terms be realistic with all numbers in your Profit and Loss Account. Provide actual data for margins, wholesale pricing and retail selling prices.
Don't guess what these important indicators are. You could end up in a fluster much like the candidates on Dragons Den where investors know if you don't know the answer. Have in your mind the worst and best case scenarios for everything but target yourself on realistic forecasts.
6: Cover all Bases
How do you know if you've covered everything for your venture? Get one of the many freely available downloadable templates showing the structure and elements required. Simply entering the information required by the template could spark new ideas and new questions to answer.
Just by developing your plan should make your business aspirations stronger. You'll be vastly ahead of the majority of others that are starting new businesses this year.
7: Keep Hold of Your Plan
Most people develop their business and marketing plan then forget about it once they have arranged finance. However, it's critical to monitor your progress. If you find yourself behind the forecast, the plan will help bring you back on track.
Update your forecast in Excel each month to see how far ahead or behind you are. The environment changes both in your industry and for UK PLC each day, so keep track of where you are.
8: Show Your Friends and Mentors
No one is perfect, so you could miss elements or not think through all parts correctly. Ask someone you trust to read your narrative and check your numbers. Independent consultants can undertake this for you or find someone who already has a successful business that you trust.
9: Getting Finance
Banks do lend to new businesses each and every day. Most applicants won't have a well-researched business plan to hand or understand the dynamics of their new venture. Having a plan will place you ahead of others. That alone will help secure the finance you require.
10: Implement and Monitor
Now you have reached the first day of your new venture, so have your plan ready and available. If you're a sole trader, keep it in your desk drawer. If you're in partnership with others, then ensure they're fully aware of all current objectives and long-term goals.