Business plans are essential tools to define exactly what you want your start-up to achieve and how you will achieve it. Having produced and analysed plenty of business plans in his career, Dr Steve Priddy, Head of Research at LSBF, shared with us the key elements of a successful plan …
A business plan acts as a road-map; it attempts to provide a pathway for the business to take in order to retain its competitiveness, maintain its structure and, most importantly, lends it an exoskeleton to plan its success on.
We all learn how to make business plans in any management-orientated course, but it is important to provide a structure to your business plan. Let’s explore that structure stage by stage.
First things first; every business plan needs a to-the-point background. A background lends the reader a summary of what your business proposition is about and what planners intend to achieve by setting their businesses in motion.
Background and Firm Summary
- Mission – What is the purpose of your business proposition?
- Long-range vision – Where will we be in 5 years’ time?
- Goals – What are your business goals and rationale?
- Start-up summary – What is the bottom line cost?
Once the background is provided, we can move on to providing a more in-depth look at the services that can be offered via the implementation of the business proposition.
- Business Model Diagnostic
- CPD Suite
- Master Classes
- On-line learning strategy and implementation
- Roundtable thought leadership events
Adding a Market Analysis Summary is essential at this stage. This summary must include relevant segmentation by geography and by business area. Also, it is valuable to incorporate a Target Market Strategy where the creator of the plan should consider both private listed/unlisted, public and private-public partnership (PPP) sectors for formulating this strategy.
The next stage involves a look at the competition that a particular business proposition might encounter in its core as well as peripheral offerings. A Competitor Assessment is not only about examining potential competitors’ offerings but also a look at the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats.
Next up, a detailed look at the business’ strategy moving forward is necessary.
Strategy and Implementation Summary
- What is the ‘Focus’ of your business?
- How do you build a ‘relationship-oriented business’ with a long term focus
- What will be your ‘Competitive Edge’?
The Marketing Strategy is one of the most important stages in formulating a good business plan. A good marketing combines the best elements of the organisation’s strengths with a solid understanding of what the marketplace is all about.
Any Marketing Strategy should incorporate the following points:
- Generating leads programme
- Sales strategy
Providing a timeline portrays the planning that has gone into your business idea; it symbolises diligence and conveys thoroughness on the planner’s part. These can be put forward as key milestones in a business plan.
Key Milestones must include as many of the following as possible:
- Finalise business plan
- Portfolio assembly
- Dedicated website development
- List of selected potential clients
- Mailing shots, approaches
- PP sales presentation materials
- Sales meetings
Do you know who will play what role in your business? How many employees/collaborators would you need and what do you have in mind for them to perform as part of your business? A brief overview of the key personnel in your business plan always makes for a good addition.
- Individuals and their roles
A business plan without a financial plan is an incomplete plan. No business can take-off, never mind survive, without a solid financial plan. This is a key step in ensuring that your business proposition comes across as viable with a tangible opportunity for it to run without descending into financial doldrums.
Financial Plans provide, mainly, a narrative overview. They should refer to key factors such as:
- Numbers of clients
- How you will service them
- Charge out rates and cost
- Rate of growth
- Predicted Profit
The key number in a financial plan is the forecasted profit, the profit margin you expect to achieve within a stipulated period of time running your business.
Finally, a list of key statistics and spreadsheets go a long-way in assessing the viability of your business in the long run.
Under ‘Appendices’, make sure you incorporate the following:
- Career CVs
- Financial models – detailed, numeric
- 3 year illustrative P&L
- 3 year illustrative balance sheets
A business plan, whether aimed at internal or external stakeholders, encompasses the entire structure of an entrepreneur’s business proposition and delivers it to the reader as a gist. Check, recheck, analyse, reanalyse and be very thorough.
And yes, good luck!
Are you an entrepreneur, a researcher or an aspiring businessman? Do share your business plans with us by leaving us a comment below!
Other Opinions and Features
Tune into our free 4-part webinar series and give yourself the best chance of success in your ACCA exam. Join…