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Business Plans: Uses and Abuses

Guest post by: Allison McSparron-Edwards

Article Overview: “Some men see things as they are and say "Why?". I dream of things that never were and say "Why not?" (George Bernard Shaw) Do you ever dream about business success and wonder how to make it happen? We all have aspirational dreams and goals but how many of us know how to turn them into reality. Many of you will have thought about writing business plans to make your dreams come true and been put off, thinking them either too hard to write, not necessary, or feeling that they are not really needed as the plans are already in your head. In fact it is important that you create plans, as they provide focus and a pathway for you to follow to achieve your business goals. In principle plans are not that difficult to write, providing some fundamentals are clearly identified and followed before you start the process.

Business Plans: Uses and Abuses

The story The purpose of a plan is to tell a story i.e. the story of your business and your dreams. It must clearly establish that there is an opportunity worth exploiting and describe how you intend to make that happen. Your "big idea" has to be attractive, durable, timely and anchored in a product or service that adds value for the buyer or end user and, of course, it has to be profitable.

End users

A plan could have many end users including investors, banks, employees, strategic partners etc. Quite often the end user may have little time to spend reading your plan and may focus entirely on an Executive Summary. If you can grab their attention they may go on to read the detail or, at the very least, talk to you about your ideas and plans.

What are they for?

There is a common misconception that a business plan is primarily used for raising capital. In fact all well run businesses should create business plans as they provide an operational blue print summarising how a business intends to achieve its goals. Their primary purpose should be to help you, the entrepreneur and owner of your business, to gain a deeper understanding of the marketing opportunities that you have identified. By critically examining your assumptions you can clarify your Vision, Goals, Strategies and Tactics and identify sensitivities and the drivers and blockers that may help or hinder you from achieving your goals. By the end of the process you need to feel confident that the strategies and tactics that you have identified will ensure you turn your big idea into reality.

Research

Before starting to write the plan you should take time out to clarify whether your end goals are achievable and whether people really do want your products and services. Understand how you can differentiate and position your offering in comparison to your competitors. Talk to your colleagues and business advisors; speak to prospective clients and end users to clarify whether they really need, and will pay for, the product and services you are offering.

Common faults

Many business plans suffer from easily remedied faults. Too many are text laden, dense, boring, unfocused and long winded. Make sure that you overcome these problems by being brief, using headings and subheadings to break up the text, highlight critical points, use bullets, charts, side bars and Appendices to refer to details and supporting documents. Don't bore your readers!

Content

There are no fixed rules regarding the content of a plan but they ought at least to cover the following:

Content

Including for example:

Executive Summary Company Background Industry and Competitor Analysis Services/Product Descriptions Client Analysis Marketing Plan Operations Plan Development Plan Team Critical Risks Financial Plan Appendices

Short summary of salient points History, ownership and key offering Opportunities, threats, strategies Differentiators Retention statistics, client relationship statistics, turnover Advertising, promotions, PR, product mix, pricing, sales Location, facilities, equipment, insurance, suppliers, talent Timing schedules, software development programmes Management team biopics, talent management and development policies, Non Executive-Director biopics Market potential, Competitor actions, development costs Assumptions, Balance Sheets, Profit & Loss Accounts, Cashflows, Key Performance Indicators, Historical Analysis, Analysis of different Scenarios , Funding Requirements, Statutory Accounts, Detailed CVs, Cashflow Projections, Product Specifications etc. etc.

The importance of the Executive Summary

It is vitally important to catch the reader's attention and to get them to focus on your "big idea"! You need to "hook the reader" in the first few sentences by using clear, concise language to express your Vision, Goals and strategies. Your job is to persuade the reader that they really do want to find out more about your plans and how you are going to achieve them. The executive summary IS the most important part of the plan and should always be written last as it summarises all the content that comes after it.

Is cheating worth it?

Believe it or not you can buy pre-prepared business plans online. The problem with them is that they are crafted in an easily recognisable style and they may fool you into thinking that you have covered all the salient points. Unfortunately your experienced readers may feel that you have "taken the easy way out" and may not trust the content.

Remember

Your business plan is unique as it is about your business, your goals and your plans to make it happen. Make sure you own the content and don't use templates or let your business coach or accountant write your plans (but do let them help and guide you through the process!).

Finally; remember the true value of the plan isn't the plan itself but the fact it engages you in a constructive critical process. It makes you think creatively by analysing, reviewing, questioning and organising research!

It is your responsibility to create the plan, to review it, to correct it, to own it, to share it with the team, to track progress and to make it happen.

And; don't forget to dream and dream ambitiously, after all: "If you only look at what is, you might never attain what could be". (Anonymous)

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Article Tags: business plans, business success, entrepreneur, financial, goals, marketing, mission, strategy, tactics, vision
Referred by: http://www.topperformancecoaching.co.uk



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