Everyone has prepared a business plan. Well, should that read, everyone should have prepared a business plan? My thinking is that these tend only to be prepared when they are needed, rather than as a useful business tool for all senior management. My top five ingredients are:

1. Understand what a business plan is;

2. Understand what you intend to use it for;

3. Identify and implement the critical steps to achieving a successful business plan;

4. Understand what needs to be included in the plan;

5. Be aware of gaps or weaknesses in your plan.

What is a business plan?

A business plan sets out the method for running a specific activity over a specific future period.

Why are business plans needed?

Business plans are needed essentially for the four following reasons:

1. A formal, explicit document of the planning process;

2. A request for finances;

3. A framework for approval;

4. A tool for operational business management.

What are the critical steps needed to achieve a successful business plan?

This may come as a surprise to my fellow business consultants, but producing a successful business plan is not as difficult as people often think, so long as they follow a logical sequence. Here is my considered view as to the critical steps.

1. Understand what you are planning and why;

2. Define the activities of your organisation;

3. Outline the current position of the business;

4. Review and discuss the external market conditions, undertake and understand a competitive analysis, and define your market positioning;

5. Define your core objectives;

6. Prepare and articulate the strategy to attain and meet the objectives;

7. Identify and review risks and opportunities;

8. Prepare a strategy to deal with risks and exploit opportunities;

9. Refine the strategies into operational plans;

10. Prepare financial forecasts including revenues, costs, cash-flow, capital expenditure and assumptions adopted;

11. Finalise the plan;

12. Get it approved;

13. Use it;

14. Review it regularly and update as appropriate.

What should be included in the business plan?

Without being too prescriptive, there are certain necessary elements which need to be included. Such elements are:

· Preliminaries – such as contents, contacts and definitions;

· An executive summary;

· A description of the business;

· A review of the market, the competition and market positioning;

· The vision, mission and objectives;

· The corporate strategy;

· The plan for developing the products and services;

· Financial projections;

· An outline of the risks and opportunities;

· A conclusion.

Understand gaps and weaknesses within the plan.

Any casual viewer of the BBC programme, Dragons Den will be aware of how easy it is for weaknesses or gaps to be identified. Depending upon the purpose of the plan, this may, or may not, prove to be critical. It is often easier to recognise such weaknesses and gaps, and be prepared to deal with them, either by noting them in the plan itself, or having appropriate answers available should the need arise.

Who should prepare the plan?

As a business consultant, this may sound like heresy, but I believe that any plan should be produced by the senior management of the organisation. That is not to say that the consultant does not have a role to play in its preparation. He does. Senior management should prepare the plan as they will then be able to present and discuss it, demonstrating to their audience that they fully understand their business and market. I believe that the consultant’s role is to help facilitate the preparation of the plan, the consultant can help undertake the necessary research, and can cast a critical and impartial eye over the plan.

If you’re one of the many people thinking about starting a small business, having a business plan is one of the first things you should have on your list of things to do. It doesn’t matter if you’re starting a small business from home or away, having a plan for your business is considered a blue print for a successful small business. What is a business plan and why do you need one?

A Business Plan
A business plan is simply a plan of what your goals are for the business, and how you plan to go about accomplishing them. Some people refer to it as a vision for your business. I like to refer to it as a blue print or a road map to accomplishing your goals.

Your plan should be spelled out in clear and defining terms and be kept simple. It should be a written document and used as a tool in managing the business.

A plan should include but is not limited to the following:

1. A statement of your business purpose
2. A description of your company
3. The goals of your company
4. The structure of the company (sole-proprietorship, partnership or corporation)
5. The product or service that you are selling
6. A market analysis of your product or service
7. Resources spent (time and money)
8. A financial plan to include financial statements
9. Information about the managing principals in the company
10. How you plan to manage and operate the company

The Importance of a Business Plan
The success of a business starts with a business plan. The plan defines your business as to what it is and how you plan to achieve the goals of the business. It presents a clear picture of your business in terms of goals and objectives.

The plan reflects how you plan to operate your business. How you plan to market your product or services. It provides a financial picture of the company.

If you are looking for money to fund your business, you’re going to need a plan for your business. When you go to borrow money, lenders and investors are going to want to see written documentation in a business plan of your financial situation. Why do they want to see this information? Lenders and investors want to see this information because they are the ones taking the risk in lending your business money.

Once you have a plan in place, it’s important that you follow it. If you’re achieving your goals you should stick with the plan. If you are not achieving your goals then you will have go back, analyze your plan to find out what is working, what is not working and why it is not working.

A plan is not etched in stone. It is subject to change. As time goes on, things change in this world and businesses like everyone else are subject to change. A good plan will reflect changes that a company has to make to keep it competitive and successful.

Where can you find samples of a business plan for a small business? If you go into any of the search engines such as Google or Bing and type in “samples of a business plans for a small business” you will find websites with this information.

This is why it is important that a small business should have a business plan. If you look at those small businesses that are successful, you will find that most of them all started with and have a plan for their business.

I am mentoring small businesses and I am amazed at the ideas I read from the entrepreneurs I have the pleasure of meeting.

Unfortunately, not many have well laid out business plans and most use the Internet for planning.

A big percentage of the documents they use from the Internet are impressive, but what they do not understand is that one cannot use a business plan tailored for another region of the world to fully execute his specific business.

Business concepts are similar universally, but execution and sustainability differ depending on one’s environment and market.

The business plans I have read display glorified projections and their market analysis clearly depicts great profit.

In short, one look at a business plan will tell you that some issues have yet to be thought out clearly. For example, competition, risk, challenges and so forth.

Before embarking on your venture, draft at least three business plans.

Individual

This plan is the truest of them all. I refer to it as the naked business plan. It covers almost everything including risk and possibility of failure. No business life lesson can be complete without a discussion on risks and risk management and no business can be started without embracing risk.

Risks are inherent in everything we do – business risk management is the key to ensuring risks are identified and a plan-B or C thought out. Some risks we can control while others we cannot.

This plan should cover who you are as an individual, what your honest strengths and weaknesses are and how you will handle stumbling blocks or closure.

It should address questions like; Can you persevere through tough times? Do you have a strong desire to be your own boss? Do the judgments you make in life regularly turn out well? Do you have an ability to conceptualise the whole of a business? Do you possess the high level of energy, sustainable over long hours, to make a business successful? Do you have specialised business experience?

Financial projections in the plan should cover, at the very least, five different modules. You should work on the plan yourself and get prepared for any outcome.

Investors

I like to call this the headlines business plan. You only have one shot at getting investors – make the best out of it.

This is a plan that shows what team you will be working with and how you plan to invest to make money for investors. Show a well laid out plan that includes short and long term financial gains.

The confidence, coupled with experience, shown in this document will determine whether you get the initial investment you seek.

Financial projections in this case can be three to five years. They are there to show sustained profit. You should not glorify the plan nor try to get a lot of money for the start-up.

You must mention what your competition is and how you plan to create your own niche market – having a business plan that does not have a thorough SWOT analysis could raise the red flag. You might end up not getting financial support.

Pick the right team, get professional advice, try to separate your product from the rest in order to achieve your own niche.

Do not spend too much money. Most people think that having a lot of money is fundamental in starting a business. That is a fallacy – you can make a lot out of very little.

Universal

This is the plan that you started out with – the ”sitting research” through which you came out with pros and cons of the venture. The plan that has been developed from different Internet searches to better understand what you will be dealing with.

This is the longest business plan. This plan has a lot of data, but you should sieve out information that is irrelevant for your business. Without this plan, it is difficulty to cover everything that needs to be covered in your proposed venture.

Starting a business is not for everyone, but great planning initiated through a solid business plan will always bring in the results.