3 things you must consider when writing your business plan
When starting or buying a business you may be so passionate about your idea that you forget the little details in a rush to bring them to life. One of these often-forgotten details is the humble business plan.
A University of Western Australia study found that the presence of a formal business plan was significantly associated with higher revenue and growth in small businesses. The fact is by neglecting to plan you're minimising your chances of success, and starting down the hard path to failure.
With the goal of guiding you down a path paved with gold instead, we've whipped up a list of three things you must consider when formulating your business plan.
Even the best business idea is nothing without a plan.
Consider the audience
The Australian Department of Industry Innovation and Science (DIIS) recommends that before you start writing your plan, you consider who the plan is for. Determining the intended audience will help you to decide which answers you need to provide. Here's a couple examples of what you should include:
- Bank or lender: you'll need to include exact figures detailing the amount you require to start the business as well as forecasted profits in future – including supporting documentation.
- Yourself and your business partner/s: Include the following in as much detail as possible: A summary of your business, your market and your finances as well as predications for the future.
Do you research
After determining your audience, you must gain an understanding of the market you're entering into and include your research in your business plan. According to HSBC's Knowledge Centre, you should include the following in this section:
- The size of the market segment you are entering, indication of whether it's growing or declining.
- Important trends in the market.
- Key characteristics of buyers in your market.
- Information about your competitors: Explain why people would chose your offering instead of others.
The more thoroughly you conduct your research during this stage the more likely it is that your plan will be effective and that your business will succeed.
Plan for every eventuation
In business (and life), everything doesn't always go to plan.
In business (and life), everything doesn't always go to plan. It's essential that you remember this when writing your business plan, including predictions and plans of actions for the best case scenario, what you expect and the absolute worst-case scenario.
The worst case plan is the most important. If you can include comprehensive details of how you will react in this situation, you can feel confident that your business will survive (almost) no matter what.
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