The Business Plan - « back to Articles
A Business Plan is like mapping a route for a long voyage. You would not set off on a journey across Canada without preparation and you should not launch a new business without a map of where you want to go and how you intend to get there.
Planning is a sure way to make your business go the way you want it to, keeping you in control of the direction and letting you arrive at your objectives.
A written Business Plan gives you a tangible method by which to measure the performance of your business. It reflects both the strengths and weaknesses of your business while giving you a second chance to plug any holes before they become major issues.
A Business Plan should contain information on just about anything that could provide insights into why, how and when your business operates. A good business plan should provide even a stranger who reads it a good level of understanding on how your business will operate.
In writing your business plan consider your personal goals. Make note of the realistic achievements for you and your family. Your personal goals may include:
Your personal aims may implicate your company. Example, if you wish to take four weeks holiday each year you must take steps to train someone to replace you or allow for a one month shut down of operations. A retirement before the age of 65 will involve estate and succession planning issues you will want to discuss with your Management Consultants or other professional advisers.
- drawing a certain level of salary
- being your own boss
- gaining the freedom to spend more time with your spouse
- retire comfortably at a certain age.
Personal and business circumstances may change so be sure to review your goals. Decide whether financial and security goals are foremost or whether quality of life issues are most important. As your goals change be sure to take them into consideration in the way you do business.
The Business Plan should include but not be limited to the following information:
Develop a strategy for achieving your personal and business goals. Break down your goals into periods of time. Short term goals are goals you wish to achieve in one year or less and long term goals that are achieved over a longer than 12 month period. Set priorities realistically; you cannot do everything at once.
- your personal goals
- business goals
- major competitors by name and size
- market size and market share
- strengths and weaknesses
- competitive position
- price determinations
- quality levels and assurance
- delivery methods
- service policies
- capabilities of your plant and human resource
- organizational structure
- production sequences
- finance arrangements
- marketing strategy & marketing plan
- research materials
- current and potential markets
The next step is to gather accurate information about your business. Some important data will be available in your own internal financial statements and records. Other information will be available from municipal and government agencies, trade associations, customers, suppliers, and even competitors.
Your Management Consultant or professional advisers will devise a format that will allow you to record the following projections:
You will note significant milestones or activities you wish to accomplish in:
- monthly sales
- monthly expenses
- profits for the coming year
- annual figures for the following three years
When writing your Business Plan make note of the names, places and reference material locations of all the particular elements of the plan. These notes can be referenced in the future and the readers of your plan can use them to verify your research results.
- production levels or standards
- personnel levels or standards
- finance arrangements
- marketing strategy and plans
- research and development timetable
Evaluating Your Plan
To determine if you are achieving your goals you must establish a regular routine for reviewing the plan. The most carefully prepared plan will not do you any good if it sits in your filing cabinet where you can not review its contents.
When evaluating your plan you will need information collected on a monthly basis. This information should include:
Significant changes to the way you do business will affect the result and direction of the Business Plan.
- profit and loss statement
- payable and receivable records
- inventory reports
- bank reconciliation
- back ordered orders and supplies
- new suppliers and clients list
Writing a business plan will require you to spend many hours thinking about your business in it's present and future forms. It is, however, one of the most effective ways to ensure you will succeed getting where you want to go.