A business plan is necessary for three primary reasons:
It gives business owners a current assessment of the business as
well as a roadmap for the future.
It helps a business grow, both organically and through outside
It is essential to have an up to date business plan in order to
secure financing, ranging from an overdraft facility or bank loan to
venture capital funding.
A business plan is a tool for decision making - remember this and
remember who it is written for - then design it to suit.
The business plan is a living document that should be continuously
reviewed in light of the business environment and actual performance.
This enables the directors to oversee business performance.
When to use outside help
For a business plan to be effective those who will have to implement
it should own it. So, it cannot just be delegated to a consultant. But
an experienced business facilitator can add value to the process,
whilst ensuring that ownership is in-house.
The objectives of the business plan are first to develop and
communicate a plan of action that will achieve the company's strategic
objective. Then to provide a means of monitoring progress towards that
objective and of stimulating alternative action if the objective is
unlikely to be met by the original plan. These cannot be achieved
unless the plan defines the strategic objective and includes
benchmarks or performance measures at key stages during the year.
The planning process
The planning process is a valuable and exciting exercise that can be a
major contributor to team building and a means of developing
ownership/commitment to the plan. Involve people, it should end up as
"our plan" not "their plan imposed on us".
There are various exercises that can be helpful in the planning
Analysis of current year financial results
SWOT analysis - strengths, weaknesses, opportunities and threats