BUSINESS PLAN- REASONS, PREPARATION
| It is a valuable tool
for the development, expansion and ongoing operation of a
business, whatever the sector the business may be in |
| It helps the business to work
smarter, not harder |
| It will be necessary when you are
selling the business to investors and lenders |
| It specifies the objectives of the
business and how these are to be performed |
| It enables you to think through your ideas and exposes possible shortcomings (such as lack of sufficient market research) that you need to address. |
| It forecasts
the assets that will be required by the business to achieve these
objectives (plant, vehicles, buildings, staff, cash) |
| It enables the businessman to
establish what commitment he is prepared to make to the business. |
| It helps build commitment because you have publicly named your objectives. |
| It gives your business a sense of direction and action timelines to reach desired targets. |
| Acts as a measure against which
actual results can be measured and appropriate steps taken for variances |
| It allows you and your staff to measure progress towards targets, which leads to a shared sense of achievement (and makes recruiting more good staff easier) |
| It builds credibility and convinces others (including lenders) that you know what your doing and where the business is heading. |
| Planning significantly increases chances of success. It enables you to perform better than you would without a plan. Research shows that businesses that undertake regular business planning have higher profit margins than those that do not. |
| Identifying information e.g.
business name, address, principals |
| Outlines the business plan, its
major objectives, how these objectives will be accomplished and the expected
results |
| It is just a summary so should be
reasonably short |
| Gives headings and page numbers for
contents of the plan |
|
History of
business
|
| Information about the principals-
their positions, experience, skills, qualifications |
| Numbers to be employed and in which
job functions |
| Location |
| Premises |
| Will premises be sufficient for
business plan |
| Details of lease agreement if
applicable |
| Listing of its products and
services. |
| Any trade marks, patents held |
| Past and future development of the
product or service. |
| Major suppliers of raw materials |
| Target trading area and customers. |
| Promotion strategy |
| Distribution strategy |
| Price strategy |
| Competitors- who they are, their
strengths and weaknesses |
| Indicate
the expected cash flow, profit and loss and balance sheets, financial ratios |
| Project
asset purchase requirements, funding required |
| Should
show prospective investors and lenders why they should provide funds, when
they can expect a return, and what the expected rate of return on their
money is. |
| Organisational
charts |
| Resumes
of the key staff and directors |
| News
items |
| Letters
of recommendation. |
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