A good business plan provides a step-by-step guide for the way you want your business to operate over the coming year or more and it should direct every decision you make going forward.
Unfortunately, there is no one-size-fits all formula, but there are some definite dos and don’ts that can help you create a plan that fits your business and serves its purpose.
The type of business plan you need and the sections within it depend on what purpose you need it to serve. There are three main types based on what you are trying to achieve:
- Strategic – These plans are often less structured and more conceptual. They are great for start-ups – when you are trying to transform an idea into a workable business model.
- Functional – A functional or operational business plan is what you need if you have a goal or direction for your business and you need your staff to get on board.
- Financing – If you are looking for investors, you need a business plan that focuses on the strengths and potential of your business. This type of plan will be more formal, factual and comprehensive, and assumes no prior knowledge of your business.
Although these types of plans serve very different purposes, they all still function as a roadmap for your business – and there are some common tips to ensure your plan is effective no matter what its purpose.
- outlines your vision, purpose, current situation and objectives.
- is short, simple and easy to understand. It uses plain English, because readers are not impressed by lots of big words and jargon – they just cloud the message.
- is a living document. It is shared, updated and referred to frequently.
- is practical. It contains more about implementation than strategy.
- sets concrete, realistic goals, and includes responsibilities and deadlines.
- is interesting – after all, you want people to pay attention to it. Don’t be afraid to think outside the box. Your business plan doesn’t have to be an A4 typed document. It could be a video or presentation – there are no hard-and-fast rules.
- uses precise data and doesn’t rely on baseless assumptions to make inaccurate projections.
- identifies your KPIs (key performance indicators) for monitoring, and outlines how you can best build value in your business as part of your business exit strategy.
- is full of fluff and padding. The aim of a business plan is not to prove how much you know about your business. Superfluous material just makes it more difficult to get to the ‘guts’.
- is too long. Gone are the days of long-winded plans and reports. Who has the time?
- doesn’t have a well-formulated executive summary (but don’t think you need to call it that). This is the plan in a nutshell and should be no more than one page.
- is not guided by clear goals. If your goals are not clear, your business plan will reflect this and leave confusion, frustration and indifference in its wake.
- uses a template that doesn’t fit. Adding your logo to a cookie cutter template doesn’t make it right. Templates are great, but remember, they can and should be adapted to fit your specific needs.
- is exactly that – ugly to look at. It is disorganised, full of typos and hard to read. The font might be too small, the layout might be wonky and it’s just not appealing. There are no rules to say you can’t include pictures. You could even include customer feedback – so long as it's relevant.
A well-considered and well-written business plan will improve your business’s chance for success significantly. It’s worth the effort, and if you know your business well, it won’t be as big an effort as you think.
If you want a better business, then plan for success. Download our simple one-page business plan template and get further information from the ANZ Business Hub.
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