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How to make a small business plan

How to make a small business plan.

This business plan template is a great tool if:

  • you’re starting your business
  • You decided to take control of your direction
  • you want to do something you love and make money.

To answer how to create a small business plan, Ill take you through some of the common aspects of a business plan so feel free to delete sections or just change them.

Depending on the nature of your business and the phases you will undertake you will be required to edit or make some changes. If you are still stuck, then please contact russell@russell-oliver.com for your first consult free.

In our downloadable template the sections are ordered in the best way for the finished plan. But sometimes it’s easiest to do the later sections first, then come back and fill in the earlier summary sections. Complete it in the order that feels right for you.

This plan is detailed in order for the finished plan, however from experience it is easier to do the later sections first (basically working backwards).

 

Learning how to write a business plan can make the difference between a successful start-up and a failed venture, but not all business owners and entrepreneurs recognize the importance of having one.

A survey conducted by NZ statistics found that one third of New Zealand small businesses fail because they don’t have a business plan. Despite this, 60% of small businesses don’t have one, and 21% of New Zealand small business owners say they don’t have time to write one.

Business owners with a completed business plan are nearly twice as likely to be successful when securing funding and growing their business.

Even if you end up enlisting the help of a professional business consultant, you’ll still need to be closely involved in the planning and writing process, so here are some of the most important ways a business plan can help you succeed.

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1. It will help you understand your market

You probably already know who you’ll be targeting with your product or service, but without a business plan you won’t fully understand how you fit into the market, what your priorities should be and the challenges you might face.

Writing a business plan requires you to meticulously research the market, which will help you learn more about what your customers really want, how much they’d be willing to pay, how you can attract them, and who your competitors are.

2. It forces you to be objective

In the early days of a business venture when things are still new and exciting it’s easy to become so passionate about your ideas and plans that you fail to see the potential downsides and put adequate safeguards in place.

Writing a business plan will force you to look at your product or service objectively and understand your strengths as well as your weaknesses.

Identify the plan’s purpose

A business plan can have a number of different purposes, so before you begin writing and researching, you should know why you’re writing it and what you hope to accomplish with it.

The challenge for most business plans is to clearly and specifically identify what the plan’s purpose is and what it is not,  “Without a clear and specific purpose or set of purposes, a business plan has little value.”

For example, is the plan’s purpose to help you raise capital? Or is it to develop a strategic framework to move from points A to point B?

The principal purpose will dictate what section or sections are most important to your plan,It should be clearly spelled out in the Executive Summary at the beginning of the plan.

Research the feasibility of your idea

Regardless of your business plan’s purpose, you’ll need to research whether your idea is fiscally feasible. Starting a new business is always a bit of a gamble, of course, but during the planning stage it’s better to be realistic than optimistic.

In my opinion, the single largest reason a business plan fails is that those creating the plan under-calculate the time and cost that will be required for the plan to break-even.

“Many start-ups with great ideas have crashed under the weight of operating expenses that outstripped funding and revenue.”

Use a realistic set of projections and looking at worst case rather than best case scenarios. In fact you should expect to have months and possibly even years added to how long you think it will take until your plan is self-funding.

Determine your goals and objectives

Determining your goals and objectives will point your business in the right direction. Goals tell you where you want to take your business and objectives show you how to get there, so in order to determine your objectives, you’ll first need to decide on your goals.

For instance, if one of your goals is to have a certain number of new clients or customers by the end of the year, your objectives might include creating a customer referral program, revamping your website and blog, or hosting an online competition to gain a greater following on social media.

 

 

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Assess the weaknesses and threats

If you want your business to succeed, it’s important to take the time to identify not only its potential and strengths, but its weaknesses too.

One area in which business plans often fail is in the accuracy of assessing the weaknesses and threats of the plan. It’s often what you don’t know or didn’t consider that can doom a plan.

For example,  while having a correct understanding of the current regulatory environment is important, it’s not as important as the potential impact of pending regulations being considered for the future. Pending regulations are often driven by the political structure that will be in power a few years from now. They can make or break an industry as well as the businesses in those industries.

Now some say gathering smart critics and having them tear your plan apart is not a good thing for your self confidence, however they are good at finding your weaknesses and issues as well as making sound advice. Once you’ve addressed the issues they’ve brought to light, you can let them have another go at it. You can repeat this process until most of them are confident in your plan.

Once you feel confident that your idea has a good chance of being successful, it’s time to flesh out your ideas and start planning for the future. So here are the most important elements of a simple business plan.

Title page

The title page is the first page of your business plan and should include the following:

  • Your company name and logo
  • The names of the business owners
  • Your main business address
  • Business Number
  • Company Number (only if you are a company)
  • The date your plan was completed
  • A table of contents

Executive summary

The executive summary is a brief overview of the ideas and information you’ve laid out in your business plan. Although it appears at the beginning of your plan, it’s the last section you’ll complete. It should generally be no longer than one page and will provide a compelling description of your business.

Here are some of the points you may want to include:

Relevant owner experience

What qualifies you to run this business? How many years of experience do you have? What are some of your achievements?

Products or services

What services or products will you provide? What is the anticipated demand?

Vision statement

What are your plans for the future? What are your goals and objectives?

Market summary

Who are your customers? Why will your products or services appeal to them? How do your products or services differ from those of your competitors?

Finances

What is your sales forecast? How much money do you need to get started? How much of your own money do you intend to contribute? How much do you need from outside sources? Remember, this is just a summary, so keep each point as brief as possible by leaving out any detailed explanations, and using bullet points and short paragraphs.

Business description

Along with a brief vision statement that outlines the purpose of your business and what your goals are, this section will provide details about the history, structure and location of your business.

You’ll need to indicate what type of business it will be, whether wholesale, retail, manufacturing or service-oriented, and list any permits, licenses or domain names you’ve registered. Include the size of your business, whether it’s a sole trader/proprietorship or a partnership and who the owners are.

You should also include information about your main business location, such as the city or town you’ll operate from, whether you’ve purchased or leased a space and why you’ve chosen this specific location.

Products and services

This section will look at the products and services you intend to provide and should address the following questions:

  • Are your products or services a luxury or necessity?
  • How do your services or products differ from what’s already out there?
  • What qualifies you to provide these products or services?
  • What is the anticipated demand?
  • How much does it cost to deliver what you’re selling?
  • Who will your suppliers be?

 

Market analysis

The market analysis section is one of the most important parts of your business plan as it will help you gain a better understanding of your industry. You’ll need to look at demographics, the target market, market needs, competition, barriers to entry and regulation.

It’s best to gather information on your potential market from as many sources as possible, but a good place to start your search is the Australian Bureau of Statistics, where you can find economic, environmental, industrial, demographic and regional statistics. For specific legal, operational and business requirements check out these industry fact sheets.

Conducting a SWOT analysis is also good way to identify the strengths, weaknesses, opportunities and threats your business may face.

Because each business has to generate revenue, the template lists the questions that need to be answered in order to develop a realistic assessment and business plan.

To identify the internal strengths and weaknesses that can impact your business, you’ll need to look at your organization honestly and objectively. For the opportunities and threats, you’ll need to look at things that are beyond your control to change, but which nonetheless must be factored into your plan.

A good way to think of the opportunities and threats is as the wind to a sailboat, You can’t change the wind, but you can and should adjust the sails.

Marketing plan

Once you have a better understanding of your customers and competitors, it’s time to create a marketing plan that will help you develop strategies to attract and retain customers.

Your marketing plan should include:

Your objectives

What are your business objectives? For instance, you may want to enhance your web presence or introduce X number of people to your brand.

A distribution plan

How will your customers buy your products? Will they buy directly from your store or website, or through other retailers and distributors?

A pricing and positioning strategy

How do you want to position yourself in the industry and how will your pricing support this position? For instance, if you’re looking to position yourself as an affordable alternative to high-end brands, your pricing will need to reflect this.

Key marketing strategies

What strategies will you employ to reach your objectives? For instance, if you want to enhance your web presence, you might optimise your website for smartphones and tablets or focus on specific SEO strategies.

Your proposed budget

How much of your total budget will you spend on marketing your product or service? How much will you be allocating to each activity?

A timeline and schedule

What objectives will you aim to reach within the next six months or one year? What marketing strategies should be prioritised? How will you measure your progress?

Management team

This section looks at how your business or will be or is currently being managed. You can list the names of all the owners and how much involvement each one will have in the running of the business, as well as each person’s strengths and expertise.

Describe other key members of the team too, such as marketing managers, office managers, accountants or other experts, and include details of any openings that still need to be filled.

You can also provide a brief overview of the salaries for each position and how much you might need to spend in order to attract qualified candidates.

Operations

The operations section of your business plan will deal with the materials, facilities and processes that are necessary for the running of your business. What sort of information you should include here depends on the nature of your business, but below are a few points you may want to include.

Suppliers

Who are your main suppliers? What exactly will they be supplying? What agreements have been put in place if any?

Equipment

What equipment will you need to get the job done? For some businesses, equipment might be as basic as a computers and photocopiers, while for other types of businesses such as restaurants or hair salons, it may include a longer list of items such as stoves and kitchen essentials or hairstyling and barber chairs.

Trading hours

What will your normal trading hours be like? What are the expected peak trading times? An online store would likely be able to trade at all hours, whereas a brick and mortar store might operate from 9 to 5.

Communications

How will customers be able to contact you when they need assistance or have a complaint? Some options include email, telephone, in store or through 24-hour chat support.

Payment and credit policies

What payment types will you accept? Cash, credit card, debit card, cheques, PayPal? Will customers have the option of paying in instalments?

Quality control

How will you ensure a consistently high standard of products or services? Who will be in charge of quality control? What procedures will be put in place?

Financial plan

The financial plan is often one of the most challenging sections to complete, especially if you’re starting a business from scratch, so it’s always a good idea to seek advice on how to create a realistic financial forecast and identify any hidden expenses.

You should include two types of expenses in your financial plan; one-time start-up costs and regular monthly expenses. One-time start-up costs may include things like your business license and equipment, while regular monthly expenses include things such as salaries, stock replenishment and marketing.

 

 

Download your 26 page pre-filled Business Plan template! This has been tested with 15 small business owners from different industries and proven to suit their needs. This template is not suitable for businesses that employ over 100 staff members.

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Business-Plan-Template
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