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.)
One way to develop a business plan is to ask a series of questions under appropriate sections and then complete the answers.
Management
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?
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.
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.
Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
