Business planning
A business plan is a document that sets out a company’s goals and how it plans to achieve them. It is typically used to pitched investors or lenders, and it should include financial projections and information about the team. A business plan in the UK should also include an Executive Summary, which is a brief overview of the company and its plans. The Executive Summary should be followed by a more detailed description of the business, including its products or services, target market, marketing strategy, and financial forecasts. The final section of a business plan should set out the risk factors that could affect the business, and how these risks can be managed. Creating a comprehensive and well-written business plan is essential for any company looking to raise capital or grow its operations.
The sole purpose of a business plan is to help articulate a proposed strategy for your business, providing an insight of the relevant steps to be taken and ascertain the resources required to achieve your business goals. All objectives of the business plan should reflect how they will help your business flourish and grow.
Why does a business need a business plan?
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Preparing a business plan will help you to set clear objectives for your business and help to set targets for future performance and profitability.
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Banks and investors will always look at the risk of defaulting making it important to ensure you have written facts and figures in a properly prepared business plan to secure funding.
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A business plan is not just for new businesses, but reviewing the business plan can help you see what goals you have accomplished and any changes that need to be made. It helps to make your business planning manageable and effective.
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The exercise of budgeting and planning will help define your target market and outline how you intend to sell/deliver your products to customers. To give your business the best chance of success.
What information should I include in a business plan?
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Description of the business.
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The products and / or services you sell.
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The capital requirements.
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Forecast and projections of the financial results.
How should I structure a business plan?
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An Executive Summary that consists of a one to four-page summary illustrating the key points that are detailed in each section of the business plan.
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Business Overview, this provides a description of the business including the business formation history, the type of business, locality, the legal structure and type of business (Internet, Shopfront).
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Provide a definition of your target market and how you will cater to the needs of your specific audience. Carry out a market analysis that can provide an overview of the trends.
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Products and services, describing the services the business offers and which products are being offered.
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The analysis is required to show the strengths and weaknesses of your competitors. It is important to show how your business will gain a competitive edge against your opposition.
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Provide projected income statements and accounts for a minimum of two to three years.
Independent Business Reviews (IBR)
It’s highly recommended to perform an IBR at regular intervals. Think of it as a health check up for your business.
A review carried out to determine the performance of a business.
An independent person or business that has had no previous connections with the business.
There is no legal requirement to do one.
Usually a stakeholder for the business. It could be anyone – someone who is considering lending / investing in your business, your shareholders or you as a business owner / Company Director may want one.
What does an IBR cover?
There is no set format for an IBR. The review would typically look at:
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Financial health.
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Cash flow projections.
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A review of the business model.
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An assessment of the company’s strengths and weaknesses.
It’s a helpful way to identify where opportunities lie for the business as well providing visibility on weaknesses, which can then be addressed.
The length of the IBR depends on the size of the business.
To be honest, clear and transparent and supply all the information that is requested by the reviewer.
You will get a written report stating the recommendations for your business.