This post is a continuation of the Article titled “Don’t fail before you’ve even started”.
Antoine de Saint-Exupery, in my eyes, has hit the nail on the head: “A goal without a plan is just a wish.” A wish is a great thing, but when you wish upon something, you need to also think about how you can get there and for that – you need a plan!
A business plan is a written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement.
Why do we have to plan?
A plan gives us a map of the route that we will follow towards the goal that is ‘a successful business’. Like any map there are always alternative routes towards that goal, so the business plan needs to find the best possible route, with the least amount of fuel used, the least amount of hurdles and with the shortest distance to get there.Without the plan your business idea is just that, an idea, and nothing else!
It then gives you the platform for – if you are looking for financing – gaining the confidence of potential investors and banks.But you use it not only for financing, it is most of all for you personally. It lets you see how far you’ve come along the way, you can see whether you have reached your targets and to see where your business needs revising, or where maybe your plan needs revising to fit the development of your business.
The business plan is what you will be held accountable against if something doesn’t go quite the way you expected it to.
What should your plan contain?
Your plan should outline your finances in detail. What is your capital and how are you going to use it? Where does the financing come from, what shares in the business might you have given away to receive financing in return?
The plan will also contain your predictions for sales, costs, growth and so on. You set yourself a benchmark that you think you can realistically achieve, after doing the research for it.
It will outline the strategies that you will be adapting to reach your predictions. The more planning you do before you start, the less problems you will face at a later point. You even tackle the small planning issues, such as what type of paper you’re going to use and so on. They might seem trivial, but if you’ve thought of everything early, you will have less distractions later.
You’ll be outlining how many people you’re going to be employing, where your business will be and what plans you have prepared for when your business grows.
It will furthermore outline your marketing paths that you are going to take to advertise your online shop. Where will you be advertising, how are you going to be using social media and what is your budget?
How long should the plan be?
You’re not writing a dissertation when writing a business plan. It doesn’t need to be an epic, even if the journey you are starting will surely feel like one. In reality, if you can keep it brief, then this is the way to go. There’s no need for complicated sentence structures. Short sentences don’t mean that they have to be ‘simple’ sentences, but they should be able to convey your message in as few words as possible.
Try to avoid acronyms and jargon. You can’t rely on the people that you might be pitching to, or your bank, to know exactly what each one stands for and you could lose them on the way.
Make sure everything is clear and can’t be misinterpreted. You don’t want people to misunderstand something, or get confused and then based upon that, shoot you down.
All in all you should try and keep the plan down to 20-30 pages and not longer. Unless your business is going to be so huge right from the beginning that you have to instantly employ hundreds of people, you should be able to cover everything in that time.
Having a wall of text, even in something as serious as a business plan is never a good idea. The topic, as exciting it is to you, might be a little dry for whoever is reading it and if you are able to break up the text with some visual elements, then that is great.
You could however use visual enhancements, such as images of products, site mock-ups etc, which might really enhance your business plan, even if it extends the page number past the ideal amount!
Visual aids are also great for showing your financial aims, sales predictions, the research you have done and so on. Make sure you back all the numbers you use in your visuals and keep them close to each one of them, so that people are aware what the numbers are for.
There’s a lot to it, but don’t fret
Don’t be worried about the amount of work a business plan seems to hold for you. There are many resources online that will help you along the way and the excitement of starting a business will carry you along all the way.
The Prince’s Trust Enterprise Programme has a good example business plan that you can fill in for yourself.
Entrepreneur.com also have a great section on their site in which they explain exactly how to write your business plan and they also have good templates that will show you exactly what is needed for you to write a good plan.