A Guide to Writing a Formal Business Plan
www.business.gov.au
If you're in need of finance to get your home biz started, or are planning on selling your business, you'll need a formal business plan. Smart home biz chicks will seek advice before starting this process. There's plenty of information and web sites out there offering downloadable templates that make the process easy. The information below is available from www.business.gov.au
Depending on what type of business you intend to start, your business plan could include these elements:
• Executive summary - a one-page overview written after your business plan is finalised
• Introduction - explains the purpose and objectives of going into business
• Marketing analysis - looks at the industry you are entering and how you fit in
• Marketing plan - your marketing strategy
• Operations plan - how you'll set up the business, i.e. structure, location, regulations
• Management plan - how you'll manage your business
• Financial plan - how you'll finance your business, costing and financial projections.
Business planning is an ongoing business activity - you should regularly review and revise your business plan.
How to Start Your Business Plan
Before you start writing your business plan it is useful to do some background preparation. This includes:
- Getting advice on business planning and checking available templates and tools that can help you develop your plan;
- Collecting and analysing information. Sources include:
o Small business advisory services run by local or state governments
o Market research providers eg Australian Bureau of Statistics
o Accountants and banks
o Industry associations
o Business peers
o Competitors
Formulating Your Business Goals
Your business goals should provide a clear picture of the business you will be in over the next years, covering:
• What products and services you are going to sell
• The customer groups and their requirements you will be targeting
• The basis of your future success. What will make customers buy from you rather than your competitors?
• What business returns you are aiming to achieve
Finalise your business goals after completing your market research.
Management Plan
This covers how your business will be structured and run, and what management capabilities will be developed. It could also cover any legal matters in relation to structure, intellectual property rights, licensing and contractual matters eg with suppliers.
Based on your research, it is useful to undertake a SWOT assessment of the business that covers:
-Internally: Strengths you should build on, Weaknesses you need to overcome
-Externally: Opportunities you should exploit, Threats you need to managePut dot points under each heading which realistically and honestly reflect your research and self-assessment. Your business plan needs to develop strategies to deal with identified issues.
Marketing Plan
Your marketing plan needs to identify:
• Your product/service offering: What are you offering your customers? What is its likely life cycle? Are there substitutes available in the market? Will it meet your customers' needs?
• Your market: Its size, geographic location, demographics and trends.
• Your customers: Who are they? What, why, where and how often do (will) they buy?
• Your competitors: Who are they? How do they compete on price, services, quality?
Your marketing plan needs to cover the strategies you will put in place to capture and keep customers. This includes how you will make your product or service available; how you will promote your product or service, how you will build your business image (including networking); and your pricing policies.
Operational Plan
You will need to make decisions on a range of operational issues, including:
• People: Will you employ or use contract staff? If so, how will you manage them? What other expertise will you need?
• Processes: What systems and procedures should you put in place? What production output and methods will you use? Research and development initiatives.
• Suppliers: Who should they be? Cost and quantity of supplies?
•Equipment/technology: What equipment and IT requirements do you have? What skills will you need to maintain or upgrade these?
• Premises: Will you set aside a room at work as an office?
• Reporting: What is the most suitable reporting system to put in place to allow you to monitor your performance?
Financial Plan
Your financial plan needs to cover:
• How much money you need to start the business
• Financial analysis - projected profit and loss over the next one to two years
• Cash flow analysis - projected cash in and out on a monthly basis so that you can check whether you will be able to pay your bills
• Balance sheet
• Sources of finance - who will lend you money and how much will you need?
• What your business break-even point is, ie what level of production is needed to cover all your costs?
Action Plan
This should set out specific tasks that need to be undertaken to implement your business plan, with clear priorities, timeframes and who will be responsible.
Business Plan Do's and Don'ts
Do:
• Keep updating your plan to meet changing situations.
• Use business planning templates and tools to be sure you cover everything.
• Refer to your action plan as a living guide.
• Remember that a short plan that gets carried out completely is going to do your business a lot more good than a long plan that doesn't even make a practical start.
Don't:
• Be unrealistic about what you can achieve or base your projections on wishful thinking.
• Underestimate the challenges in growing a business.
• Be afraid to ask for help.
• Spend too long creating the "perfect" marketing or business plan. Many businesses get bogged down writing huge documents that never get implemented.
More Information
Your local Business Advisory Service can offer you one-on-one advice on developing your business plan. It also offers low-cost workshops covering all aspects of business planning. Australian chicks should visit www.business.gov.au WANT TO USE THIS REPORT IN YOUR E-NEWSLETTER OR WEB SITE? You can, as long as you include this complete blurb with it: Online entrepreneur Sue Papadoulis publishes the popular e-newsletter Smart Biz Chicks. If you're ready to jump-start your home business to make more money and have more fun and free time, get your FREE tips now at www.homebizchicks.com
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Chief Chick Sue Papadoulis is committed to empowering women who work from home with the means and know-how to live a life of abundance. Sue educates and advises work-from-home women, and those who dream of working from home. A wife, mother and the owner of two successful home-based businesses, Sue is uniquely positioned to help others.
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