New start ups and SME's are frequently asked for a business plan for all sorts of issues, but mainly by banks and potential investors. Most people in this situation have no idea what level of business activity they are likely to achieve, and therefore do not see the relevance of business planning. Especially when you consider that the first number that you write down is likely to be wrong.
Business plans are all about quantifying your thoughts about how you are going to grow your business and the assumptions that you have made in achieving a particular result. The plan only becomes a useful tool when you measure actual results against your plan and determine where the deviations have occurred and what effect they will have on your business.
The development of an effective business plan is an iterative process, and can in many instances involve several cranks of the handle, especially when the initial result is not what you expect. It has to be realistic, not too optimistic or pessimistic. About the only elements of a business plan that can be reasonably accurate are the overheads. The most difficult part is arriving at a reasonable sales target, and determining the variable costs associated with those sales.
The route to market is very important, as if you get this wrong it will lead to a complete disaster, so your market research is very important.
In developing your plan you will need to discuss the objectives with your colleagues, and this can be assisted by the use of someone who is independent and can lend an unbiased ear to the various issues that will arise.
Recently sold my practice, and now looking for consultancy and business planning work. I am also available for hand holding for new start ups, or businesses going through growth problems.
Post articles and opinions on Lancashire Professionals
to attract new clients and referrals. Feature in newsletters.
Join for free today and upload your articles for new contacts to read and enquire further.
