Writing a Business Plan: A Guide for Your Small Business

A succinct guide to plotting a course for your business

Writing a Business Plan: A Guide for Your Small Business

How do I set business objectives and goals?

In order to realise your long-term vision, it is crucial to have achievable milestones set out along the way. These will be measured by the achievement of business objectives set out along the way.

What objectives your business has will obviously depend on your mission, vision and values, and a whole host of other factors including the size of your undertaking and the sector you’re in.

However, all your goals should follow the SMART principles:

  • Specific: Relates to specified tasks and activities, rather than general statements about improvements.
  • Measurable: It should be possible to assess whether the goals have been achieved.
  • Attainable: It should be possible for you to achieve the outcome.
  • Realistic: It should be realistic, given your resources, that you could reach these goals.
  • Time-limited: You need to set specific dates for improvements.

 

What business information should I include?

Your business plan should include all the empirical information you, or an outsider, would need to gain a true understanding of your operations and where you stand in the market. In particular, you should have details of:

  • Your marketing and sales activity.
      • Your product’s place within the market (its pricing and quality compared to others)
      • How you price your product
      • How you promote it
      • The marketing channels you use (trade press, social media, advertisements etc)
      • Your selling methods – how efficient they are, and any hidden costs they involved (like management time)

 

  • Operations.
  • Your premises: what commitments you have made, and the advantages and drawbacks of the space and location
  • The production facilities: how production is managed, the age of the equipment, the capability of the facilities to cope with demand
  • Management information collection systems: how they operate, how reliable they are, and how capable they are for dealing with new business and forecasted expansion

 

  • Financial performance. 

Including a history of the last five years’ finances, with:

    • Total sales figures broken down into component parts
    • Gross margins for each component sales part
    • Movement of working capital items like trade, stock, creditors and debtors
    • Forecast expenditure of capital for the period
    • A current balance sheet
    • A current profit/loss account
    • A forecast for the next three years – make sure this reflects the size and complexity of the business, and structure it in the same way as the history. Back up all forecasts with evidence.
    • If you’re planning to raise money, use a cashflow forecast: state why the cash is required, give a precise figure, include the predicted interest and dividend cost, and add a contingency element of 10 or 20%.

 

What should I include in a SWOT analysis?

  • Give a one page analysis of your strengths, weaknesses, opportunities and threats
  • Strengths could be brand name, management experience, market position, etc.
  • Weaknesses could be a small customer base or lack of capital
  • Opportunities could be rising demand or diminished competition
  • Threats might be fresh competition or market pressures
  • Be realistic about your strengths/opportunities and honest about your weaknesses/threats

 

You can read more about SWOT analyses here.

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