“Living in the moment” might be great in meditation or another spiritual practice, but when it comes to operating a business, you need to look ahead and chart a course for where you want to go.
Just as you would be armed with a map and a plan of the steps you need to take to reach your destination when embarking on a trek, business planning can assist you to determine your goals and objectives, and to decide what steps to take in order to reach them.
All too often, people tend to enter into a business without a real solid plan in place. They might excel in their field of expertise but not recognise that running a business requires more than being talented at what they do. A business also needs a clear direction or it will be more than likely to flounder and get side-tracked.
Here are In this post we will outline several benefits of good business planning, and a brief guide to what is involved in writing a business plan.
Benefits of a business plan
A documented business plan can be used in a number of positive ways:
- For goal setting – establishes your goals and objectives and charts a course to attain them.
- Communications - creates a tool for communicating about your business which can be particularly useful for obtaining finance from banks and investors. It can also be used for communicating with suppliers and to show employees their place within the organisation.
- Allocation of resources – helps you to make the most efficient use of the resources that are available to you.
- Risk management – can assist you in identifying hazards and devising strategies to control risk, such as through occupational health and safety, developing sound procedures, and determining the level of insurance coverage you need.
- Determining SWOT – you can use your business plan to determine your Strengths, Weaknesses, Opportunities and Threats (SWOT) as well as those of your competitors.
- Setting priorities – in any business, there is a lot to do on a day-to-day basis, and it can be easy to get side-tracked. Having a plan in place can help you determine what your priorities are and to set daily, weekly and monthly schedules.
- Decision making – such as deciding whether to rent a bigger premises, hire new employees or contractors, seek new investment, purchase new assets, sell assets and so on.
What a business plan entails
An initial business plan needs to start with a title page and brief one or two-page overview of your business – including structure, ownership, locations, staff, products, services, vision statement, target market, and other pertinent information.
Following this, it should delve into the detail covering these areas:
- Organisational structure – including management, ownership, key personnel, and staff retention strategies.
- Products and services – market position, pricing strategies, unique selling points, and growth potential.
- Risk management and insurance – covering risks and strategies to control them.
- Operations – plant and equipment, inventory, and credit and payment policies.
- The market – customers, market research, competitors, SWOT analysis and marketing strategies.
- Finances – requirements, objectives, sales and cost projections and cash flow.
- Supporting documentation – such as surveys and financial reports.
Developing and documenting a business plan is not a one-off exercise either. It needs to be used as a reference and guide to help you keep your business on the right track. And while it is important to remain as consistent as possible, a business plan should not be set in stone but regularly reviewed and refined where necessary.
Don’t forget that if your business plan is a big file and you wish to send it to potential investors or other interested parties, you can use a virtual fax service like mBox. As well as being able to send and receive faxes online, mBox can show you how to email large files without bringing your server to a standstill.
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