The 15-minute catch up with Chris Batten at the 4Networking meeting this week got me thinking about business plans and how each business should really prepare one as it sets out the journey your business will travel.

The analogy is that you wouldn’t endeavour a family holiday trip by just turning up at an airport with your passport and a credit card!

Again, would you just go to a garage and say “hi, I need a car – anyone will do”!  And you end up with a Mazda MX5 for a family of 5!!

So why would you just start a business without having a plan!

There are many different business plans you can plagiarise from the internet and whilst many of them may take you on a mammoth journey, that may be fine for larger organisations but for many small businesses that’s too difficult to produce and the likelihood is that you will get bored and the plan will sit in the cupboard until someone asks for it!

As a qualified bank manager, I always ask clients for their business plans.  Not because it is an integral part of the lending, but it can help with the lending process if one is produced.

Now the tricky part – when was the last time you looked at it!

Quite often I am given a plan that is quite old and doesn’t reflect what the business looks like today – new products and services, figures are in old pounds, shillings & pence!

Ideally, you should be reviewing your plan on a regular basis – it will be different for everyone but none the less it should be a living document!

If you have a business plan and it works for you great!  

But if not, then may I suggest you start by giving some thoughts to the following headings!

  • Summary

A short description of what your business does and what product or services you offer.

  • Background

This part tells the reader how the business came into being; perhaps looking at the barriers to entry such as qualifications, the investment needed to start up and the experience your business has gained over time.

  • Products / Services

You should look at the key product or services that you offer; what makes them unique; who your clients are or what is your target market.  What new products are being worked on / services offered?  Where industry standards are and what does the future look like.  What does the marketing plan look like?  Are there industry-specific exhibitions/conferences that should be attended?

  • Directors / Management Structure

Identify key members of staff and what they do.  What training plans are in place for your staff.  Or if it’s only you in the business what further development do you need to keep your business current.  There isn’t a great demand for VHS film rentals!

  • Key Risks

The sole trader needs to be aware that if he falls ill or is unable to work – how are the bills to be paid.  You take out car insurance & house insurance, but you forget that your business also needs to be insured!  Do you have one customer that accounts for more than 60% of your income – the risk here is that someone may come along and offer the same service cheaper – no sentiment in business!  Do you pay well in your sector – staff don’t seem to be as loyal as they were back in the 1980’s!  IT failure – have you got a back up of all your data?

  • Competition

Could be viewed as a risk but I believe you need to know what your competitors are doing, believe in your own unique selling proposition is whether it be price, quality or ease of use!  Don’t be frightened to price your goods and services higher so long as there is a perceived benefit to the customer.  Do you think BMW care about the price of a Dacia?

  • Financials

You know what your costs are – look at your bank statement!  Some are fixed and some are not, so start a spreadsheet recording the amounts either monthly, quarterly and annually.  Do the same for the costs that are associated with your products/services that go up and down with how much you make/sell.

Once you have the costs nailed, you will then see what profit you need to make to cover the variable costs and part of the fixed costs.  If you operate in a seasonal trade, then it’s important that you make enough in the busy spell to cover overheads in the quiet period!

It is always worth looking at sales in the best possible outcome, the worst and what is likely.  That should focus your mind in that if budgets are not met then it’s a trigger for you to look at reducing costs or increasing prices.

Some may argue that the figures should feature near the top of the business plan, but I always believe that to get to the numbers you have to visit where you have been, know where you are going before you work out whether or not it’s worth doing!

Hope this helps!

Gordon Duffy FCIBS

Business Funding Expert Ltd


+44  (0)7921 141859




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