As an accountant, I’m often surprised by how many business owners either fail to create a business plan or make one and then never refer to it.
It’s like driving without the GPS switched on; it might be an adventure and there’s every possibility you will get there in the end but you’ll take a lot longer to get to your destination (and you will probably spend a lot more money along the way).
I prefer to keep things simple so I am a big fan of a one-page business plan. This document will give you the framework you need to drive your business in the right direction. What’s more, if you ever have to take your hands ‘off the wheel’, having a business plan means someone else can step in and take over.
Whether it’s a side hustle or a major venture, your business needs a plan. Here’s what to include on yours:
#1 A description of your products or services and target audience
First things first, what exactly is it you sell?
To add to this, who will the buyer be? Do you sell to other businesses or to consumers? Does your product or service have mass appeal or only suit the needs of a niche group of people?
#2 Competitor analysis
What percentage of your target market are already locked in with the competition and how easy or difficult will it be to bring them your way?
#3 Marketing strategies
This will look at the main channels and strategies you will use to let people know your business exists. You might decide to pay for Facebook ads, create a magazine to give to prospective customers or even write a book as a ‘lead magnet’.
#4 Sales
Who will do the selling for you; for example will people buy online without ever meeting you or do you need to meet with people face to face so you can seal the deal?
#5 Budget and expenses
Many businesses take months to become cash flow positive so you need to think about how you will navigate running at a loss and be aware of your operating costs.
In this section of your business plan, make a note of:
How much you realistically expect to earn in terms of revenue and profits
Your break even point
Set up costs
Ongoing expenses
Contractor and supplier costs
Insurance etc
#6 Human resources
Who will operate your business and what roles will they hold? You may start out as a solopreneur and expand to include a customer service manager, marketing manager and technical crew.
Write down the positions you will need to fill and on what basis; for example, your bookkeeper and accountant can be outsourced so you don’t pay a full time wage for these services.
#7 Key milestones
What are your goals around customers, transactions and revenue over the next six to twelve months and beyond?
You may decide you will hire ten people by the end of the year, or that you will have hit 7 figures by a certain time. Writing this down in your business plan is important because it will allow you to track your process. Over time, your goals may change or you may decide to move in a different direction but you at least have to have some idea of what you want to or could possibly achieve.
More points for your business plan
It’s nice to ‘top and tail’ your business plan with an executive summary and an appendix with any relevant notes.
If you want to expand to an extra page, you can include:
A SWOT analysis that reviews your strengths, weaknesses, opportunities and threats
An outline of your vision, mission and values
As a final tip: don’t keep your business plan a secret! Share it with your partner and team, and consider having it somewhere visible in your office. This way, you can refer to it regularly.
Need help creating a business plan?
Your business may all seem crystal clear in your head but it can be difficult to articulate everything on paper. If you want to make the process as pain-free as possible, it helps to sit down with an accountant who can give an unbiased opinion and let you know what you haven’t considered.
Finally, it’s important to regularly review and update your business plan. This can remind you of what you’re working towards and ensure it reflects recent changes such as new clients coming on board, big contracts or supply chain challenges. I recommend catching up at least around the financial new year so you can review progress and reframe your business plan as necessary.
Ready to put together a simple business plan? Book a free 45-minute call with a small business accountant from JVP Advisory.