On December 2nd 2014, my third ebook: Planning and budgeting - Advice for business owners and finance managers will be published for ipad, iphone and kindle and will be available from amazon.com.
A good business plan drives the business towards its specified goals by addressing activities, accountabilities, resources and timescales – within a framework of explicit assumptions.
The business plan should focus on how the company will maintain and improve the existing business as well as any new initiatives.
More detail does not equate to better budgeting accuracy and the same applies to the business plan. Passing the sense check and covering key elements is more important.
2. Strategies and objectives
The best business plans set key short and long term objectives and outline strategies for accomplishing these.
- Business plans should link activities and actions to the strategies so that you are able to measure the actions and the results of those actions.
- Actions usually involve resource and cost so this will help you to ensure that the budget reflects the plans.
- Answer questions such as where do we want the business to go, how will we get there and what is the fall back plan if things don’t work out as expected?
- Use a SWOT analysis to identify the key activities that the plan needs to address.
The activities and actions included in business plans should be mensurable so that you can monitor the level of success in achieving them.
- Measurements do not need to be financial only. For example a goal could be improved sales via the activity of investing in customer care and customer feedback can be the measure for customer care.
- Time line the activities and actions so that you can budget them by month.
Assign responsibilities and accountabilities to the planned actions so that you can empower people, measure performance and can reward them for success.
Ensure that all staff allocated with responsibilities in the business plan are involved at some level in producing the business plan.
5. Risks and assumptions
Good business plans address risks, including the risk that the underlying assumptions become invalid.
- As well as identifying risks plan for activities and responsibilities for mitigating those risks.
- Check that the business plan is affordable.
- Run scenarios so that if results fall below set criteria the business is able to respond. For example, if sales fall below £Y in region A the alternative plan is to consolidate that geography with region B.
What is stopping you?
As a first step, why not pick the phone up and call John or email him and arrange to meet up.
John's website is: http://www.nomizon.co.uk
His credentials: http://www.linkedin.com/in/johntoppin