A business plan for your company is a formal written document. It contains business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. A business plan also describes the nature of the business, background information on the company, the company’s financial projections, and the strategies it intends to implement to achieve the stated targets. Business plans are required to obtain financing.
Business plans target immediate goals required to reach the external goals. They may cover the development of a new product, a new service, a new system, a restructuring of finance, the refurbishing of a factory, or a restructuring of the company. A list of critical success factors allows success of the plan to be measured using non-financial standards.
Business plans include sections such as strategic plans and operational plans.
Strategic plans identify and target internal goals, but provide only general guidance on how they will be met. Operational plans describe the goals of a department, while project plans describe the goals of a particular project. They also address the project’s place within the company’s larger strategic goals.
At a minimum, a business plan should:
- Be as objective and logical as possible. What may seem like a good idea for a business can, after some thought and analysis, prove not viable because of heavy competition, insufficient funding, or a nonexistent market (some of the best ideas are simply ahead of their time).
- Serve as a guide to the business’s operations for the first 12 months and sometimes 5 years, creating a blueprint for company leaders to follow.
- Describe management responsibilities, detail personnel requirements, provide an overview of marketing plans, and evaluate current and future competition in the marketplace.
- Create the foundation of a financing proposal for investors and lenders to use to evaluate the company.
Business plans are decision-making tools; the content and format being determined by the goals and audience. A business plan for a bank loan will build a convincing goal for the company’s ability to repay the loan. Venture capitalists are primarily concerned about initial investment, feasibility and exit valuation. A business plan for a project requiring equity financing will need to explain why current resources, upcoming growth opportunities, and sustainable competitive advantage will lead to a high exit valuation.
A business plan for your company may seem like a big hurdle. You know your business; you’re the expert on it. For that reason alone, leveraging a plan for growth isn’t nearly as challenging as you think. Business plans are short and concise, and can be used and refined over time.
Explanations of the product and / or service are kept simple and direct, with appendices providing the full specs of a plan, if required. It is a chance to refine strategies and “make mistakes on paper” rather than in the real world, by examining the company from all perspectives. Once completed, a business plan will make you feel more confident about your ability to set up and operate the business.
The business plan is best written by the founder/s, but you may need professional help from a business adviser in the preparation of your business plan. Regularly read through your business plan so that you are familiar with the contents, and are quick to answer when investors query about any of the various sections contained therein.
It is a common misconception that start-up business cannot attract investment. Start-up companies that have drafted business plans are 65 per cent more likely to acquire financing from government or private investors than companies without. An entrepreneur who is launching a new business will write a business plan with the aim of attracting financing, both capital investment and loans. You can attract investors with for a start-up with preparation, planning, strategy, and proper research, all of which will shine through in the business plan.
Business owners must effectively use limited resources to improve their position in the market while continuing to manage the critical aspects of their operations. To achieve long-term success, business owners must lay the foundation for future growth in the business plan. Before you start writing your business plan, you need to spend some time doing in-depth research into your industry and market, regardless of your previous experience in the relevant industry. You can identify certain challenges and find solutions to them, which is critical when meeting with potential investors.
Successful businesses do not remain static. They learn from mistakes; and adapt and react to changes in the economy, the marketplace, their customers, their products and services, etc. Successful businesses identify opportunities and challenges and react accordingly.
The most successful entrepreneurs are those that write a business plan between 6-12 months after deciding to start a business. Investors are interested in entrepreneurs who show initiative.
Preparing a business plan draws on a wide range of knowledge from many business disciplines such as finance, human resource management, supply chain management, resource management, intellectual property management, and marketing, among others.
Contact us for more information on how you can obtain a business plan for your company to secure finance. We also draw up other documents such as projected management accounts, projected income statements and graphs, feasibility studies, due diligence reports, financial plans, and financial projections; as well as making applications for company registration certificates, VAT registration certificates, SARS registration certificates, and B-BBEE registration certificates.