Creating a Business Plan? Think Beyond the Numbers
A business plan can appear a daunting prospect when you are seeking support or additional funding.
Don’t get hung up with the numbers – they shouldn’t appear in the business plan, but rather in the financial forecast.
The business plan is for you to tell your story in a structured way, the financial forecast is to tell the same story in numbers. Think beyond the numbers.
The business plan is for you to tell your story in a structured way, the financial forecast is to tell the same story in numbers.
The plan will need you to think ahead several years so think at the strategic rather than the operational level. Generally the plan needs more detail for the next 12 months at the tactical level.
Here are a few of the elements that you’d need to consider in a business plan
Skills of Management Team
Investors are looking for investable people. It’s a constant theme on BBC’s Dragons Den. The owner is the passion behind the business and needs to display competence, knowledge of the core product, trust and staying power.
Get to fully understand your USP, market size, audience, barriers to entry and be clear on your exit plans. Only then will you know the opportunities & threats for your business.
Unique Selling Point
the “So What?” test.
It’s worth asking lots of different people to give their feedback on your product or service. You probably think you have several unique selling points but will probably come to earth with a bump when they say “What’s wrong with using x?” or “I think product y does the same thing”. I call it the “So What?” test.
You don’t have to come up with the next mp3 player – the entire offering doesn’t have to be unique, but just an aspect of it. You might think of it in terms of its best bragging rights – something the competition may do but not as well. Perhaps service levels, delivery, ingredients but steer away from geography or price.
Barriers to Entry
Once your product or service appears in the marketplace, how quickly and easily will it be for others to copy and take your business?
The UK legal industry has had a number of artificial barriers removed recently and the supermarkets have taken the opportunity to sell commoditised legal services at a far more competitive rate.
The solicitors who were in this space will struggle to survive. Compare that to the patent attorney firms, unaffected by the changes, who need many years’ specialist training to become qualified and continue to charge high fees for the privilege.
Target Market & Audience
What problem do they have which you can solve?
Put yourself in the shoes of the people who will be purchasing your product or service. There may be many different types. Why do they buy from you? What problem do they have which you can solve? There may be many different reasons.
Try grouping the types of person and reasons into families. Make sure the message in the marketing of your offering is directly reaching out to the right people.
Have a clear idea of what you want from the business. Some owners choose to run their business as a “lifestyle” which means it tends to play second fiddle to their life. This type rarely grows beyond the owner being the business & taking a reasonable salary. However there is no business to sell once the owner retires.
The alternative is to view the business as a separate entity and as the business grows, plan to step away from the day to day running of the business leaving a team in place. The exit plans here are a lot more clear cut.