Preparing the Plan
A good business plan is a complete description of a business and its plans for the next one to three years. It explains what the business does (or will do if it’s for a new business); it suggests who will buy the product or service and why; and, it provides financial forecasts demonstrating overall viability, indicates the finance available and explains the financial requirements.
A written business plan is, however, only an encapsulation of all of these components at a particular point in time. Your thoughts and ideas before you started in business will inevitably be changed by the experience of starting and running your business. Your business plan needs to reflect your growing experience. Use your plan to compare actual experience and results against your initial ideas and change it as often as you think is necessary. This will enable you to stay in control and help you to plan for success.
As an entrepreneur, personal aspirations affect how you feel about self-employment and what kind of business you want to run. Are you in it just for fun - or to make money? An assessment of your strengths and weaknesses will help you to focus on what products and services your business is capable of producing, and to identify the skills you need to develop further. Researching the market in which you are trading will enable you to identify the opportunities from customers and threats from competitors that exist for your business. From all this, it should be possible to develop a clear idea of what your business is doing, where you should be going, and how you are going to get there. As suggested above, you will also need to think about the resources that will be needed - cash, equipment, premises, people - and how they will be deployed.
Compiling the plan
You will create your plan based on information which you collect from a variety of sources.
For most businesses, the business plan will be the main method of convincing prospective funders that the business proposal is viable and that the proprietor has the commitment and determination to succeed. It is important therefore to take the time to research the content carefully and to present it professionally.
Your business plan should be structured in a format that can be quickly and easily understood. The main part of a business plan normally needs no more than eight to ten pages supported, if necessary, with more detail in appendices. Your plan will then be manageable, and a working document in which you, and potential funders, can find the management information you need.
Think of your business plan as a marketing tool - in this case marketing yourself to prospective funders. It needs to be honest, but it should present you in the best possible light. It should be easy for busy people, such as bankers, to read and assimilate quickly the required information.
Now read the section on: Contents of a Business Plan
Find out more
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