EXPERT TIPS AND GUIDES

It isn't just start-ups that need a business plan. 

You may run a restaurant or pub and plan to open a new branch or section to the business; similarly for a hairdresser's, a motor trader, a chiropodist - whatever your business, expansion plans probably mean the business will need an injection of capital. Any bank or investor is going to want the insurance of a solid business plan before they'll even consider handing over hard cash.  

These days, with credit still tightly restricted, the soundness of your business plan, its profit forecasts and assessment of risk, is going to come under greater scrutiny than ever. 

There's a lot of advice out there about how to structure a business plan, but we've tried to focus on essentials and condense things down to 10 core tips, ones applicable whatever business you run from be it a retailer, property owner or manufacturer. 

First, though, what exactly is a business plan? 

In a nutshell, it's a description of your business and an analytical projection of its prospects. 

So, with this is mind, before anything else, you should consider two things: Do you have what you believe is a sound business idea?  Just as importantly, can you argue convincingly that it's a sound business idea?  And, do you believe you have properly evaluated the market you're aiming at and that you understand it? 

If the answer to both is yes, start putting together your plan. 

Here are some do's and don'ts: 

1. Don't write just to impress, using business management jargon that's unclear, simply because it seems to make what you're saying sound grander than it really is. If you're talking about sales people, don't call them Customer Fulfillment Executives!  If you believe in your business, explain it in simple, direct language that's easily accessible.   

   Remember, this isn't a document you should be compiling and then forgetting about. It's far more: a route map for the development of your business.  It may be subject to change, but it's still something that you genuinely intend to follow, so make it clear. 

2. Include an executive summary. This will appear first and will be the first thing anyone reads.  But you should write it last.  It's a distillation of what your business is all about and it should be short, to the point and compelling. That may well be the hardest part of the plan to write.   

   Think of it as your 30-second Lift Speech - that's how long you'd have to impress a big shot banker you're traveling in a lift with.  You may find bullet points are a good way to hone precisely what you think is most important. 

3. Don't get too hung up on mission statements or long-term visions.  These can be fine, but they can also be nothing more than vague puff.  Most smart investors will want to focus on seeing that the initial planning and financials are sound and carefully thought through.   
4. When it comes to forecasts, never ever guess. Back up what you forecast with reasoned arguments and/or data and research. If you don't do this you'll lose credibility with any potential investor faster than they can say 'Next, please'.  
5. Spend a lot of time on your financial projections - these - apart from the overall concept - will be the most heavily scrutinised sections of your plan.  If they're just wishful thinking, it will speak volumes about how professionally your business is run. 
6. For every aspect of the plan that can be categorised as 'strategic' - basically an objective  - make sure you spend a great deal longer explaining how this strategy will actually be put into effect. In other words, above everything else, be practical.  
7. Keep what you write as short as you possibly can. There's no prescription for the length of your plan because every business is different, both in scale and style. But it's worth reviewing everything you've included and asking whether you can remove individual words, sentences, even whole sections. The less time it takes to get essential points across, the more chance you have to impress. 
8. Do ask someone you respect (or several people), to read and review your plan. Make sure they are people who know lots about business, but next to nothing about your business sector. That way you can be sure that your plan is clear to people outside your industry. 
9. Be careful to show you have considered cashflow and not just profits. It's all too easy, especially with start-up businesses, to think only in terms of profits, but it's poor cashflow that can bring a fundamentally profitable company to its knees. Potential backers will be impressed to see this has been properly considered. 
10. Remember that, most of time, it's not vital to have a unique Dragons' Den style idea to sell. Most businesses are based on old ideas properly executed in locations where there is a gap in the market for that product - and that's true whether your business is involved in manufacturing, engineering, wholesaling or it's a shop.  Don't spend too much time on what's unique about your business unless it really is a key component.  Just show that there's a demand for your product or service and that you have carefully considered how to supply it.