How to Make a Business Plan

Are you thinking about starting your own business or already have one but haven’t created a business plan? A business plan is the key to success. It’s a roadmap that will help you achieve your goals and make your business dreams a reality by outlining your objectives, strategies, and how you plan on achieving them.

If you’re not sure where to start, don’t worry. We’ve put together a step-by-step guide on how to make a business plan so that you can get to business immediately

Page 1: Current Standpoint: The Now of Your Business Plan

The first page of your business plan should detail where your business is currently at.

Markets & Services

This is where you’ll outline your business’s products or services. If you offer multiple products or services, this is the section to detail them.

List the following:

  • The products or services your business offers
  • Your key markets/customers and how they contribute to your revenue and growth
  • Potential new markets or services you could offer
  • Concerns you have about your current markets or services

Skills & Competencies

This section is all about your talent. Outline the skills and experience of you and your team.

Include:

  • The current skills of you and your team
  • Any skills gaps that need to be filled
  • How you plan on filling those skills gaps

Tip: You could use a SWOT analysis here to really get into the specifics of your business’s current situation.

Facilities, Assets & Equipment

Next, you should including a summary of your current physical resources, such as:

  • The facilities your business occupies (e.g., office space, warehouse, etc.)
  • Any vehicles or equipment your business uses
  • IT and communications systems
  • Capacities and constraints
  • Dependencies on key suppliers

Financial Status

To round off the first page of your business plan, include a summary of your current financial situation. This should include:

  • P&L statement for the last financial year
  • Balance sheet as of the last reporting date
  • Cash flow forecast for the current year
  • Key performance indicators (KPIs)
  • Assets, liabilities, and equity
  • Outstanding invoices and debts
  • Inventory levels

Tip: If your company has gone through any major changes in the last year, be sure to mention them here. For example, if you’ve had a change in ownership or moved to new premises.

Page 2: The Future: Where You Want Your Business to Be

Now that you’ve taken stock of your current situation, it’s time to start thinking about the future (short, medium, and long-term). The second page of your business plan should be all about where you visualize your business being in the next 1, 3, and 5 years, specifically.

Markets & Services

First, you’ll need to detail your plans for your markets and services. This section should answer the following:

  • What products or services would you like to offer?
  • Are there any new markets or customer groups you’d like to target?
  • What pricing changes, if any, do you foresee?

Skills & Competencies

In this section, you’ll need to detail the skills and competencies you’ll need to achieve the goals you’ve set for your business. This includes:

  • The skills and experience you and your team will need
  • Any training or development you or your team will need to undertake
  • Detail any concerns you have about your ability to develop the necessary skills and experience

Tip: A skills matrix can be really helpful here to map out who on your team has which skills and what needs to develop.

Facilities, Assets & Equipment

The third section on page two should focus on your plans for your physical resource upgrades or changes to be able to achieve your goals. This includes:

  • Updates or changes to your current premises
  • New vehicles or equipment you’ll need
  • IT and communications systems you’ll need in place
  • Capacities and constraints you need to be aware of
  • The estimated cost of any upgrades or changes

Financial Projections

Next, you need to provide financial projections for your business. This should include:

  • Income statement projection for the next three years
  • Balance sheet projection for the next three years
  • Cash flow projection for the next three years
  • Expected turnover and profitability
  • Key performance indicators (KPIs) you’ll be tracking
  • Any major assumptions you’ve made in your projections

Risk Assessment

Last but not least, you should include a risk assessment. This should detail:

  • The risks you anticipate for your business
  • How likely you think each risk is to occur
  • The potential impact of each risk
  • The contingency plans you have in place to mitigate the risks

Tip: SWOT analysis can be really helpful here to identify internal and external risks.

Page 3: The Strategy: How You’re Going to Achieve Your Goals

Now that you’ve set out your goals and created a plan for what you’ll need to achieve them, it’s time to start thinking about your strategy. The third page of your business plan should be all about how you’re going to make it happen – in other words, your action plan.

Markets & Services

First, you’ll focus on your plans for your markets and services. This section should include:

  • Your development plan for new products or services
  • Your plans for targeting new markets or customer groups (market entry strategies)
  • Your plans for pricing changes, if any
  • Marketing & sales activities
  • Timelines for each of the above

Skills & Competencies

Next, you’ll need to detail your plans for developing the skills and experience you and your team will need. This includes:

  • Training and development activities for you and your team
  • The number of new team members you’ll need to recruit and when
  • The number of existing staff members who will require training
  • Expected outcomes of training and development
  • Staff strucure changes

Facilities, Assets & Equipment

The third section on page three should focus on your plans for your physical resource upgrades or changes. This includes:

  • Updates or changes to your current premises
  • New vehicles or equipment you’ll need
  • Disposal of any surplus assets
  • IT and communications systems you’ll need in place
  • Capacities and constraints you need to be aware of
  • The estimated cost of any upgrades or changes
  • Timeline for implementation

Financial Plan

Here, you’ll want to plan how you’ll finance everything you’ve outlined above. That includes:

  • Your plans for raising investment, if required
  • Your plans for taking on debt, if required
  • Your plans to use any existing cash reserves
  • Your plans for generating new revenue streams
  • Your exit strategy, if applicable
  • Expected periods when you’ll need to use reserves or make losses

Risk Mitigation/Management Plan

Last but not least, you should include your plans for mitigating or managing any risks you’ve identified. This should include:

  • What contingency plans you have in place to mitigate the risks
  • Your plan for monitoring and reviewing risks on an ongoing basis
  • Who is responsible for each element of the risk management plan
  • The review period for your risk management plan

Now that you’ve reached the end of your business plan, it’s time to start putting it into action! But remember to take some time to review and revise your plan on a regular basis. After all, as your business grows and changes, so too should your business plan.

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