Often budding entrepreneurs are so passionate about their ideas, and have thought so far ahead on their mental roadmap to global domination, that it is easy for everyone else to get left behind.
That’s why, even in these days of blue-sky thinking and cloud computing, the good old-fashioned business plan is still a necessary part of the puzzle to effectively deliver your strategy.
A decade of seeing previously confident young entrepreneurs reduced to quivering wrecks on Dragon’s Den has taught us that if a business plan isn’t watertight, investors will waste no time picking it to shreds with their bare hands. So how can you avoid the next victim being you?
More than just a sales tool
A business plan must first and foremost be a way to demonstrate the value of the business to potential investors – translating brilliant ideas into hard data and projections based on solid assumptions – but it must also do more than that.
It needs to act as a roadmap for growth and include detailed ways in which this growth will be achieved. By doing this you can ensure the plan is not just a tool for short-term success but also for long-term expansion and sustainability.
To make this a reality you need to take a long look at key issues including: value proposition, marketing assumptions, operations plan, financial plan and staffing plan.
Not just a one off
Everyone understands the need for continuity in business so surely that means people understand the need to regularly update their business plans, proposals and aims? Well not as much as you’d think. The idea of a business plan as something you put together when you start a business and keep in a dusty drawer is all too prevalent.
But as your business hopefully expands and evolves it makes perfect sense that your business plan will need to be revisited and large parts of it re-written. And it’s not only your own business that will change – transient markets mean you will also need to develop your plan continually to reflect new external challenges.
Update your assumptions
Any plans or forecasts, as any economist will tell you, are only as good as the assumptions on which they’re based. And just as the initial assumptions when you write your original plan must be as accurate as possible, as conditions change you will need to update them.
You can do this by keeping abreast of changes in financial policy and market health. If you don’t have time to do this, getting together external financial advice may seem an expense you can’t afford – but in the long-run it could bring back a return on investment of many multiples.
Think of your customers and not just yourself
It’s tempting when writing and updating your business plans to think only of your internal challenges. But forgetting about the changing tastes and needs of your customers can be just as catastrophic as getting your financial sums wrong.
Marketing, regular interactions with customers and asking for feedback should all be part of your master plan. And how you interact with customers will change very quickly in the modern age. Social media is currently flavour of the month but some businesses are even now reverting back to the offline marketing model as electronic marketing becomes saturated and predictable.
So make sure you know how your customers want to be contacted, you are talking to them (and ultimately selling to them) in the right way and you know what they want.
Help is at hand
The good news is that there is help available for business owners from pre-seed start-up to well-established SME (Small and Medium Enterprise. Initiatives like the HSBC Elevator
programme which offer funding and mentoring to help SME owner-managers support through seminars, guides and interactive tools like the Business Plan Tool.
Further reading: People forget ‘pain’ of entrepreneurship