6....The Plan
So now we've done the ground work and it's time to start piecing the puzzle together. Let's start with the business plan, the most critical part of this exercise.
Once your business is up and running you will be very busy for a while, putting out fires, panicking and generally running around like a headless chicken, so it is vitally important that you don't lose sight of the longer term objectives.
So what should the objectives of the plan be? Nice and simple, there are two.
1. To show to people who are giving us money and persuade them that we know what we are doing.
2. To keep the business (and you) on course.
How many plans should you prepare? Our suggestion, two. One for outsiders, being conservative with costs and sales, this is the "must not fail plan". The second plan is yourself, be a little more bullish, set the bar a bit higher.
What should be in the plan?
1. A summary.
- business type
- business name
- business vision
2. Past performance (if not a new business)
-when started
-accounts for past three years
3. Your employment and business record and of others working for you.
-strengths and achievements
-weaknesses and how how you intend on overcoming them
4. The product or service.
-a simple description
-why the product is unique
5. Marketing.
-the market size
-likely customers
-your competitors
-what advertising or promoting will be done and by who
-who will sell
-your pricing
6.Operational Details.
-your premises
-licenses, permissions
-suppliers
-equipment and plant required
7. Financial Analysis.
-cash flow forecasts for at least two years
-profit and loss forecasts for at least two years.
-assumptions behind forecasts
8. Objectives.
-what the business objectives are short and long term
-what financing is needed
Phew, now thats a long list! You may or may not use all of these and some may not be relevant, you might even come up with some of your own. Your plan should reflect your business and what you are trying to achieve. Try to not make your plan too long and conversely not too short. Too long, and whoever is reading it will lose interest, too short and it will look like you don't have a plan. The length will also be dependant upon how much, if any, financing you are trying to secure. The bigger the amount, the longer and more detailed the plan.
To make it a little easier to grasp, here is a sample business plan for you to play with. By all means feel free to use it, but remember, it should reflect your business. Note there are no profit or cash forecasts with this plan, they will be covered in the next section.
Oh and one more thing....for goodness sakes put the plan in a nice folder and dont use it as a coaster!
