Having a well-researched and logical business plan will not only get your venture off the ground, but also keep it on track when it is up and running. In the first instance, unless you have a strong plan, you are unlikely to secure any funds and your idea could fall at the first hurdle. Your plan will serve as a structured form of communication to your investors, whether it’s the government’s Business Link service, the banks or even family and friends, and it will provide reassurance as well as a means for everyone, yourself included, to measure your business’s performance.
A business plan will help you to priorities what exactly needs to be achieved and by when. Do you need to find premises for your business before you hire staff? Should you be talking to wholesalers before your product has been finished? In the current climate, it’s also important to outline what strategy you have in place for getting your venture through the recession – perhaps you consider it recession proof, or you have done your research and have started in a sector where companies are growing, or you have strong measures to control expenditure.
The answers will be different for each business, but it certainly helps if they are clear in your mind. ‘If objectives are clearly flagged up, they are more likely to be achieved,’ says Tim Berry, president of business planning software company Palo Alto. By using your business plan to priorities key tasks, you can also use it to plan your cashflow. It’s vital to establish just how much you intend to spend and when. Whether it’s to buy stock, order uniforms, lease equipment etc., unless your finances match your requirements at the right moment, your business could stall.
Clearly, compiling a business plan should be at the top of your ‘to do’ list. If you are in a partnership or part of a potential management team, then decide early on who will write the plan, and then the same individual should be assigned the task of making the business stick to it. How far ahead to plan will again depend on your own aims and the type of business, but a year, broken down month by month, will be a minimum.