Planning is key to any business throughout its existence. Every successful business regularly reviews its business plan to ensure it continues to meet its needs. It’s sensible to review current performance on a regular basis and identify the most likely strategies for growth.
Once you’ve reviewed your progress and identified the key growth areas that you want to target, it’s time to revisit your business plan and make it a road map to the next stages for your business.
Most potential investors will want to see a business plan before they consider funding your business. Although many businesses are tempted to use their business plans solely for this purpose, a good plan should set the course of a business over its lifespan.
A business plan plays a key role in allocating resources throughout a business. It is a tool that can help you attract new funds or that you can use as a strategy document. A good business plan reveals how you would use the bank loan or investment you are asking for.
Ongoing business planning means that you can monitor whether you are achieving your business objectives. A business plan can be used as a tool to identify where you are now and in which direction you wish your business to grow. A business plan will also ensure that you meet certain key targets and manage business priorities.
You can maximise your chances of success by adopting a continuous and regular business planning cycle that keeps the plan up-to-date. This should include regular business planning meetings which involve key people from the business.
To find out more, see our guides on how to review your business performance and how to assess your options for growth.
If you regularly assess your performance against the plans and targets you have set, you are more likely to meet your objectives. It can also signpost where and why you’re going astray. Many businesses choose to assess progress every three or six months.
The assessment will also help you in discussions with banks, investors and even potential buyers of your business. Regular review is a good vehicle for showing direction and commitment to employees, customers and suppliers.
Defining your business’ purpose in your business plan keeps you focused, inspires your employees and attracts customers.
The plan needs to include:
- The marketing aims and objectives, for example how many new customers you want to gain and the anticipated size of your customer base at the end of the period. To find out about marketing strategy, see our guide on how to create your marketing strategy.
- Operational information such as where your business is based, who your suppliers are and the premises and equipment needed.
- Financial information, including profit and loss forecasts, cash flow forecasts, sales forecasts and audited accounts.
- A summary of the business objectives, including targets and dates.
- If yours is an owner-managed business, you may wish to include an exit plan. This includes planning the timing of your departure and the circumstances, e.g. family succession, sale of the business, floating your business or closing it down.
If you intend to present your business plan to an external audience such as investors or banks, you will also need to include:
- your aims and objectives for each area of the business
- details of the history of the business, including financial records from the last three years – if this isn’t possible, provide details about trading to date
- the skills and qualifications of the management involved in your business
- information about the product or service, its distinctiveness and where it fits into the marketplace
Once you’ve drawn up your new business plan and put it into practice, it needs to be continually monitored to make sure the objectives are being achieved. This review process should follow an assessment of your progress to date and an analysis of the most promising ways to develop your business.