Tips to create a business plan you’ll actually use

One of the first things you’re told to create when starting a business is a business plan. However, a business plan shouldn’t just be something you develop when starting. This strategic tool can be created anytime you need more focus and direction, such as when you’re expanding your business, planning for the years ahead, or having a strategic goal in mind.

But to get the most from your business plan, what should be included?

In this article, we’ll discuss what questions your business plan should answer and tips to create a plan you’ll actually use.

What should be included in your business plan?

Your business plan can be a powerful strategic tool if used correctly. It should define your business:

• Vision

• Goals

• Objectives

• Strategies on how to get there

Essentially, the what, when, and how of your business, ideally over the one, three or five-year timeline.

Your business plan should ultimately be tailored to your particular situation, and it should be concise and easy to understand as well as follow. 

While your company can run without one, a business plan will give you direction, such as how to expand your business, bring a new idea to life, or generate more growth. 

To get the most out of it you also want to review your business plan at least annually, either within your own business or with your business advisor.

20 questions your business plan should answer

Understanding the idea

1. Does your business idea have merit?

2. Is there a demand for what you’re offering?

This can be a confronting thought, as you might love the idea. However, a business idea with merit will be able to prove there is sufficient demand and can generate profit. 

These questions go hand in hand with understanding the market as well as how you’ll provide the service or product.

Getting started

3. Will you require finance for the operation?

4. What hours of work are required to achieve your desired results?

5. Should the business not work out, can it be easily shut down?

6. What are your start-up costs and do you have enough money/cash/capital reserves?

Understanding what you need to invest before you get started will also help you assess the practicality of the idea and if it’s the right timing for your business. For example, if extra hours and resources are required, can this be achieved with your current team or would you need to hire additional staff?

It’s also important to have an exit strategy, especially for new ideas or expansions in the market. This will help you minimise losses and maximise any profits you may be able to achieve, ensuring your making an informed decision rather than one direction by emotion.

Providing the product or service

7. How will you attract clients or customers?

8. Who will be your main supplier/s?

9. Is there adequate competition amongst your suppliers?

10. Do you require business premises?

These questions are all about understanding what you need to drive success and deliver what you’re promising. This will also help you understand the overall costs of the service or product, in turn helping you understand what margins you need to make a profit.

Understanding the market

11. Is your idea easy to replicate? (i.e. What is similar in the market and how is it different?)

12. What strengths, weaknesses, opportunities and threats do you need to consider? (here a SWOT analysis is key)

While we all think our idea is unique, understanding the market and where we sit in it can help us make more strategic and informed business decisions.

Creating your SWOT analysis can help you:

• build on strengths

• mitigate weaknesses

• take advantage of opportunities

• minimise the impact of potential risks and threats

The key here is research and data, giving you a good understanding of the market you’re entering and predicting challenges or changes you’ll need to deal with.

Defining success

13. Are you aware of your cash flow and do you know what your break-even point is?

14. How much revenue is required to break even?

15. Do you have a KPI (key performance indicator) in place to measure success?

Understanding your break-even point is essential not only to help create real key performance indicators or targets, but also to minimise losses, set better budgets, and make more informed decisions on pricing.

Understanding your cash flow and having forecasts in place can also help keep you on track and make strategic changes to ensure your targets and goals are met.

Supporting your plan and idea

16. Do you have enough contacts? (i.e. potential customers, referrers, current customers that refer and promote you)

17. Do you have a mentor/advisor who has done something similar that could be an invaluable resource on your journey?

This is about how you’re going to drive success and assessing what support you need to get there. 

It’s all well and good to have a great product or service, but you need regular customers or clients to generate profit. You also need to think about how you’ll find more, leverage the ones you have, or expand your reach.

Asking yourself these questions as well as having a mentor or business advisor to navigate any challenges will allow you to make more strategic decisions and make proactive changes.

Generating revenue

18. What are your trading terms and what types of payment will you accept? (i.e. BPay, credit card, cheque, direct deposit, Apple Pay, or funds transfer)

Defining how your customers or clients will pay for your product or service is more than just setting up invoices and bank accounts. 

It’s essential to understand how your customers or clients prefer to pay and what terms work best for them as well as the product or service type. For example, if you’re selling consumer products, electronic funds transfer as your only payment method might be too inconvenient for some and impact your sales. 

Reviewing your trading and payment terms and aligning them to your cash flow and your processes can also minimise cash flow and credit risks.

Goal setting

19. What are your short, medium and long-term goals?

20. Do you have someone to make you accountable for these goals?

While setting goals is essential, without having someone to keep you accountable these can simply be words on a page. 

By having an accountability partner, such as a family member, mentor or business advisor, you can keep motivated, and focused, and establish a commitment to your goals. This in turn increases your chance of success.

Are you feeling overwhelmed by the process, or perhaps that your business plan isn’t working for you?

We can walk you through the process, creating practical steps to create a tailored plan to reach your business goals. 

Please call 03 9428 1062 to start the process.