Research published recently claims that owners with sound start-up business plans are 16 per cent more likely to survive and grow1, yet previous Barclays research suggests that less than half of small firms in the UK have a formal business plan2, which means potentially missing out on a range of benefits.
Business plans aren’t just useful when your business needs funding or finance. They can help you to judge your performance, prevent poor decisions and keep your business on course to achieve its long-term goals.
Although business plans don’t guarantee success, you’re more likely to succeed if you have one. And writing or updating your business plan will equip you with up-to-date knowledge of your market and business, including its strengths, weaknesses, opportunities and threats. You will have a clear idea of what you’re trying to achieve (your goals) and how (your strategy).
Take a look at our top ten tips for creating a winning business plan.
1.) Give yourself enough time
Your research must be thorough, because leaving out key facts and figures will undermine the strength of your business plan. Don’t rush – give the task of creating or updating your business plan the time and attention it demands. It’s important.
2.) Don’t hide your weaknesses
Sound business plans contain a SWOT analysis, highlighting the opportunities offered by the business’s strengths, as well as potential threats posed by its weaknesses. Being honest about your weaknesses shows intelligence, honesty and awareness.
3.) Make sure your executive summary packs a punch
Executive summaries appear at the front of a business plan and convey it main points. If any key facts and figures are missing it will undermine your business plan. And if your executive summary doesn’t hook the reader, they won’t read the rest. Simple.
4.) Get the length of your business plan right
Some business plans contain way too much information, when experienced readers will head straight for the executive summary, maybe a few other pages. But don’t make your business plan too short, either, because it will look like there isn’t much to say. Between 10 and 20 pages is usually about right.
5.) Don’t bore readers
Your business plan should tell the exciting and inspiring story of a business that’s going places. Engage readers and inspire their confidence in you and your business. Make readers want to read more. Leave out irrelevant information or unnecessary detail. No one has the time.
6.) Prove the business opportunity
If your business cannot make enough sales it won’t achieve its long-term aims. Your business plan should clearly show where your sales will come from. All the better if that’s from a younger market, one that’s growing and isn’t hugely competitive.
7.) Get your numbers right
You business plan must include all key financial data, with figures supporting any claims you make. Do not make wild assumptions based on hope, opinion or figures plucked out of the air. If your numbers don’t add up, your business plan will lack credibility.
8.) Make your plan look totally professional
If your business plan looks amateurish, readers won’t be impressed. Your business plan should be well laid out and logical in structure. Don’t overburden pages with too much information. To aid understanding, break up copy with headings, subheadings, images and illustrations. Create a smart-looking PDF version you can send by email. If you’re creating a hard copy, use a decent printer and quality paper stock, with a professional cover.
9.) Get your language right
There should be no spelling mistakes or incorrect grammar. The copy should be clear, crisp and concise (“all killer, no filler”). Keep the language professional, yet accessible. Avoid “corporate/management speak” and jargon (specialist terms where necessary should be explained).
10.) Update your plan regularly
Many people create a business plan when starting up, only to forget about it until they suddenly need finance or funding. But, if updated regularly, a business plan can be a useful tool that reminds you of your goals and strategy, so you can keep your business on course for success.
The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management. This article originally appeared on the KPMG Small Business Accounting website
1 www.startupdonut.co.uk, Aug 2017
2 www.barclays.co.uk, Nov 2014