Planning is key
A business plan is, in essence, a roadmap for your business. Like a map, it will help you towards your destination – whether that is tripling the size of your business in the next year, selling the business within five years, or establishing a business that you can work in for a lifetime.
If you’re looking for investment, a lender will insist on you having a comprehensive business plan. Think about the following questions:
- What will the business look like in one, three and five years? This will set out your vision for your company’s growth
- What’s the opportunity, and what does the competition look like?
- What resource (people, funds, support) will you need to achieve your aims?
- What partnerships (with distributors, suppliers) will you need to develop?
The more time you can spend on your business plan, with regular reviews, the better. You need to keep heading towards your vision and don’t worry about the odd setbacks here and there.
Class SWOT?
Pull together a SWOT chart, which will really help you dig into the details for your business plan and provide a useful checklist for all the issues that may affect your business.
List all the Strengths you have in your business, including your skills, industry contacts, location. Also have a look at your Weaknesses (and be honest) – for example, if you’re running a brewery and your skills are concentrated in brewing, do you need help with sales or finance?
The Opportunities section should be a list of the ways you can increase sales, such as new products and new markets. The Threats list should look at any change that could take away revenue or market shares, such as a new entrant that provides a similar service or product, or if many of your raw materials are imported, does this make you vulnerable to currency fluctuations?
The SWOT can then feed into your business plan. For example, if you decide to make the most of a weaker pound by exporting more, does this mean you need to employ someone with relevant contacts overseas or more funds to increase capacity?
Funding your growth
Many businesses grow at a steady rate, with all growth funded from cashflow. However, if your vision is to grow the business faster, then you may need extra funding.
Indeed, if you’re growing at a fast rate, it’s very likely that you will run into cash flow problems, for example having to pay for more stock before revenue from extra sales comes in.
Plan for growth
Fast growth rarely comes without issues, usually around funding and resources, so the more you plan, the fewer problems you’ll have. Build a strong business plan, and keep talking to staff, suppliers and funders, and you can keep heading towards your vision.
