Mention of a business plan seems to send many an owner of a small to medium sized enterprise into a spin. It is true that the task of writing one may sometimes seem a daunting task – a feat that might appear to require an economics degree at the very least.
In fact, such appearances may be deceptive and the production of a workable and helpful business plan may prove a fairly straight forward and relatively simple affair requiring very little in the way of academic sophistication in favour of a large degree of common sense.
Funding for your business
Classically at any rate, the primary sources of funding for small and medium sized enterprises are in the shape of offers to investors or applications to banks for loans.
In either case, a business plan – and quite a detailed one at that – is likely to be indispensable. It may be the critical document required by any investor or bank looking to commit funds to your business.
Small business loans
One source of funding where you are unlikely to need a business plan, however, is in making an application for an unsecured small business loan.
Typically available for loans of between £3,000 and £50,000, with repayment over the relatively short term of up to 52 weeks, the streamlined process offered by the majority of online lenders mean that the information you need to provide about you and your business is by no means demanding.
Loans like this are available from a number of lenders, but to gain an impression of just what is involved in the application process, you might want to look at the guide written by Everline Finance entitled “Business Loans Explained” – it offers a useful summary on the benefits of such a loan and how to apply for this kind of credit.
The business plan as your guide to action
A business plan may be useful for far more purposes than a quest for funding from investors or loans from banks.
Just a few of the benefits are listed on the government website about business planning and include:
- the opportunity to set out exactly what is envisaged in your business idea or mission;
- the detection of potential problems or obstacles to your achieving your mission;
- a clear exposition of the goals and objectives of your business in the immediate term (3 years or 5 years are typical periods);
- a document that allows you to monitor and measure the progress that is being made towards realising goals, objectives and your underlying business mission.
These benefits might be summed up in an adage used by many management training courses: “if you don’t know where you’re going, any bus will take you there”. A business plan is designed to set out just where you want to go and what methods you propose to use and how you intend to get there.
Writing your business plan
In order to help you achieve the essential benefits of a business plan, there are a number of useful templates available. Each one may differ in certain details, but there is a common theme to the structure and to the various components likely to make up a successful plan. This template suggested by the website This is Money, for example, may provide a useful starting point:
- title page – clearly identifying your company name and contact details;
- table of contents – to make the reader’s navigation around the document easy;
- executive summary – just as it says, a summary of the main arguments, conclusions and supporting documents incorporated into the plan;
- the plan – divided, as appropriate into sections detailing the immediate, mid-term and longer-term objectives of your business, a description of what your business actually does, how it operates, the people involved, the market in which you are operating, and the financial resources you are likely to employ, the income streams you hope to generate, and the overall earnings you intend to accumulate.
In this way, you might aim to make your business plan a genuine guide to action and a measure against which you are going to be able to evaluate the performance of your enterprise in the short, medium and longer term