If there ever were such a thing as a perfect business plan there isn’t now: COVID has shown us how uncertain the future really is. 2021 is a fantastic time to start a business precisely because there are so many changes happening, but it is more important than ever to anticipate them. Consequently, it isn’t only new businesses that need a new business plan – everyone should be doing it. The road ahead simply isn’t the road behind and a new plan is a vital roadmap into the future.
The value of a great business plan
Take the time to write an excellent detailed business plan and you will reap rewards. Potential investors will be reassured and impressed that you have taken account of possibilities like new tariffs, future lockdowns, remote working, home delivery demand or online shopping trends.
A great business plan however is mostly for yourself. It helps you clarify and refine your key ideas for the business, ultimately allowing you to improve them. It makes you check your assumptions and encourages you to plan for the unexpected. How might costs and prices change? Will the market move or the competition decrease and how will you adapt?
Creating your plan
The first step in any good plan is research. You need to gather all the relevant information about the industry you plan to enter, the current state of the market, and brand competitors. The location of your business should factor into your assessment, both from a logistical perspective (imports, exports, deliveries) and in view of your customer demographics. For example, a sleepy village with an average inhabitant age of 76 may not be the best place for a tattoo studio, but fashions could be changing!
Needless to say, detailed financial projections are needed. As well as researching your costs thoroughly, you need to assess realisable prices and revenues. Now more than ever, it is wise to examine several possible scenarios and plan for how you will react to each situation. That will likely include identifying how you will get the funds you need, be it through investors, loans, or personal savings.
What to include
A business plan should begin with a dynamic introduction to your new brand. Start with a concise summary, including key information that will encourage a reader to learn more.
The normal structure of a business plan is then problem/solution/competition/SWOT, where “SWOT” stands for strengths, weaknesses, opportunities and threats. In the post-COVID and post-Brexit world, SWOT should be longer. The “problem” is the market need your research has identified, and the “solution” is the way your business will answer it.
It is very important that your goals are quantifiable. Include your research findings and show how your venture fits into that picture and into the market niche you have identified. All your requirements (and their costs) are part of this solution. Your business description must include staffing, organisational structure, financial plans, realistic projections and a break-even analysis. Identify key operations and processes and describe your core strategies, including how you propose to attract and retain your target customers.
Take your time but not too much
According to research from Harvard University, those who spend too long preparing a business plan often lose out by struggling to secure investors and failing to enter their market at the right time. Conversely, those who spend no more than three months on their business plan see their chance of launching a successful business increase by 12%.
Help is at hand
Once you have collated all the relevant information, the good news is that there are plenty of tools and templates available online to help you craft the perfect business plan. There are also professionals who will write an expert plan that targets potential investors. It is also smart to get an experienced business owner look over your plan, as they may well be able to make useful suggestions for improvement.