“I know what I’m doing. I know where I’m going. It’s in my head.” I am often told by small businesses that they are too small to bother with a business plan.
These same businesses want to grow, but continue to be distracted by speed bumps and detours. I like to think of a business plan as being like a roadmap.
Reaching the destination
I’m sure you’ll agree a roadmap saves you time by helping you to identify the best route to a destination.
Similarly, a business plan helps you achieve your business goals more efficiently by enabling you to prioritise your time and resources.
Dealing with detours
On the road, you might face detours or congestion. This is also true in business, for example, your attention could be diverted from core tasks or you could be overloaded with work.
Luckily, a business plan is more comprehensive and dynamic than a simple printed roadmap; it’s closer to an interactive online map. These maps can identify areas of congestion or upcoming hazards and recalculate a better route.
Similarly, your business plan should identify potential challenges and weaknesses, include strategies to overcome them and have the flexibility to enable unexpected issues to be addressed.
Getting a loan
To get a car loan you need to prove you’re a safe investment. This is also true if you want to get a business loan.
Your business plan is a key document you will need to provide to a bank or finance provider to show your financial history and growth potential, i.e. why they should lend money to you, showing your best side.
What should I put in my business plan?
- Your business: include the vision, purpose and objectives of your business.
- Operational information: list your ABN, structure, registrations, licences, insurance, etc.
- Products/services: what your business provides, why you provide it and a list of key suppliers.
- The market: identify the characteristics of your industry, competitors and customers.
- Direction: identify your short and long-term goals and an action plan to achieve these.
- Financial information: include costings, assets, liabilities, financial statements and projections.
- Marketing plan: your strategy to promote and grow your business. It should be clear and realistic with measurable goals, deadlines and a budget.
- Supporting documentation: include a copy of your protocols, staff details, contracts, leases, etc.
Mark Brennan is the Australian small business commissioner.