Your business plan will define exactly what your business will do, how it will do it, how much it will cost and when you expect it to become profitable. Who will be involved in the running of your business? Will you operate your business as a sole proprietor or will you be working with others in a partnership, trust or company? (See Choose a business type.)
Content of your business plan
One way to develop a business plan is to ask a series of questions under appropriate sections and then complete the answers.
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- What is our business?
- What are our products and/or services?
- Who are our target customers?
- Who are our major suppliers?
- What is the scope of our customer base?
- What is our competition?
- What is our strategy to gain our target customers?
- What is our strategy to retain our target customers?
- What is our initial marketing strategy?
- What is our ongoing marketing strategy?
- What is our method to establish our production?
- What is our method to continue our production?
- Where will our business be conducted?
- What is the tenure of the premises?
- What is the medium and long-term suitability of the premises for our business?
Plant, equipment and vehicles
- What are our requirements for plant, equipment and vehicles to operate the business?
- Which computer system is appropriate to cover customers, sales, production and financial recording and reporting?
Registrations and permits
- What permits are required for premises, product storage and plant operation and business operations?
- What patents should be registered to protect the proprietary products of the business?
- What trademark registrations are required to protect the business name, logo or product names?
- What registrations are required in relation to the business?
- How will the business operations commence?
- What is the proposed management structure?
- What is the availability of the proposed management for commencement of the business?
- What is the proposed staffing structure and remuneration packages?
- What is the availability of the proposed staff for commencement of the business?
- What is the source and timing of the internal funding proposed to establish and fund the ongoing operations of the business as detailed in the Budget and Cash Flow?
- What is the requirement and indication of availability of external funding necessary to establish and fund the ongoing operations of the business as detailed in the Budget and Cash Flow?
- What is the proposed ownership and operating structure of the business, whether a company, trust, partnership or a sole trader?
- A time-frame relevant to each section should be developed and linked to the overall plan to meet the proposed start date and the ongoing operations of the business.
Source: E Compu-data Pty Ltd
To refine your competitive advantage, you must establish who your potential clients or customers are and how you will provide them with a better service than your competitors.
You must have a clear image of who your customer is and then seek to address their interests and concerns. What are the characteristics of your target customers?
- What is their age?
- What is there income?
- What are their time constraints?
- Where are they?
- How educated are they?
To be successful, your business needs to find a large group of people who are not currently being served by the existing businesses in your industry or who you believe could be served far better by your own business.
Don’t make assumptions about your potential customers. Do market research to find how to best serve your potential customers.
- What are other businesses in the area are offering?
- Are they directly or indirectly competing with your business?
- How are they catering for their customers?
- How will you differentiate and stand out in the market?
Constantly readdress these questions
These questions will need to be addressed in your business plan and constantly readdressed in the ongoing operation of your business. You may find that your business attracts customers who have needs that you had not imagined and need to adjust your business to accommodate their concerns.
If you have set out to capture a particular section of the market, how successful have you been? You can only answer these questions by maintaining close contact with your customers and asking them what they expect from your business.
The business plan will need to answer the questions that potential investors will have of your business. The plan will have to answer questions about the legal structure of the business, finances and competitive advantage.
No one will be prepared to invest in your business if they don’t clearly understand how it works, what it does and how it does it. Clearly describe all of these functions of your business and convey this message in the briefest possible form.
Your plan may include several pages of supporting material and explanation of each aspect of your business; but it must include a summary page that highlights the most significant numbers associated with the business.
Your business plan should be updated each year so that you can budget for the coming year and take industry changes into account.
Your business plan will need to go through at least two stages of writing in order to take the financial position of your business into consideration. Your initial business plan will be a plan for prospective investment and should be written to address your audience of potential investors. Once you have secured the start up capital then you will need to readdress your business plan, writing a brief summary plan of your business for your own reference.
Keep your business plan, or a summary of its main points, available in your office, preferably on your desk. Know your basic objectives and regularly consult the plan, but don’t lock yourself into your plan. Use it as a guide rather than a rule.