Why You Need a Business Plan

It’s pretty hard to get to a new place successfully without Google Maps. In this same sense, it’s pretty hard to start a new business successfully without a business plan. A solid plan will provide your business with inspiration, direction and targets to track your success and keep you accountable. This Business Kitz blog will provide you with a guide to creating an awesome business plan!

What is a business plan?

A business plan is a document that describes the critical aspects of your business and the important strategies and structures you have in place to achieve them. Your business plan should document how you plan to manage your business overall, including your products, services, operations and finances, etc, and should evolve and change with time and business growth.

Why do you need a business plan?

Having a business plan can be the key to success, even if you are just starting out or have been running your business for a while.

A business plan serves to…

Gives you control – The brainstorming and planning process can help filter out and streamline various business processes that could slow down or negatively affect your business. If you have been in business for a while, looking back at your business plan can help you decide what methods / strategies have been working.

Help with prioritising – Having time to decide what your long-term business goals are gives a sense of direction in terms of decision making, defining your objectives, mapping out and implementing specific strategies that will help you overcome potential obstacles in the future. 

Finding investors / seeking funding – If you are seeking funding, having a detailed business plan prepared to present to prospective banks and investors will show how serious and thorough your business processes and trajectory are to prove why they should invest in your business.

Communicating goals and objectives to internal stakeholders – If all team members are familiar with the business plan, all management, employees and other interested parties can be on the same page in regard to business’ objectives and strategies.  

How do I write a business plan?

Before you start writing your business plan, you need to ensure that you have a clear idea of your business’ concept, structure, processes and how it will make money. Please also ensure that you register your business’ name.

Depending on your business size, structure, industry and phase, the elements of your business plan can vary. The general elements that a business plan consists of include:

  • Business Details – including the business name, registration date, business address, Australian Business Number (ABN), Australian Company Number (ACN), Tax file number (TFN), owners, contact details, website details, social media details, etc.
  • Executive summary – provide a brief overview of the business idea, distinctive features, operations, financial projections, short term and long terms goals, etc. This section ideally should be written last after all other sections have been filled.  
  • Business Profile – an outline of your business and covering your vision, details relating to product and services, place of operations, and industry and competitor analysis. You can also add in any research done regarding the industry you plan to enter into and the respective market trends. Adding a SWOT Analysis (strengths, weaknesses, opportunities, threats) in this section is also recommended. 
  • Marketing and Sales strategy – should highlight your detailed market research and analysis. It should also state your objectives, forecasts, target market, customer profiles, marketing tactics, setting KPIs, competitiveness / positioning, customer management, and how you will be measuring your marketing effectiveness. 
  • Operating plan, including legal and financial matters – covering standard operating procedures, quality assurance, performance management, production, location, stock and inventory management. It should also document all the legal and risk management considerations you will be taking up. For example, structure, contracts, lisences, intellectual property, etc. You should also be outlining the possible consequences and solutions to overcome the risks stated. With financial matters, it is important to include details relating to start-up costs, profit and loss forecast, cash flow forecast, financial ratios, break even point, funding arrangements, payment plans, etc. 
  • Action plan – highlighting a set of actions to be taken to check your progress before you review and update your business goals and plan. This should be done regularly to assess which actions have been completed, which one needs to be updated and so on.  

Final Tips:

A business plan takes a lot of preparation, research and time to complete. Do not leave your business plan to the last minute. Seek professional help if required to look over your draft and for personalized advice if you are not confident to complete it yourself. There are also government services like workshops, seminars, networking events,  that can help you get started with your plan and to establish and grow your business. You can also start off with a smaller one page business plan that covers high-level information about your business value proposition and business model. Once you have completed and are satisfied with this short plan, you can use it as the basis for your full detailed business plan. 

Legal advice

A business plan systematically describes what your business is all about and helps in building and creating value for your customers and team. Knowing what direction to follow, what your pricing strategy will be, who to partner with, along with many other decisions are extremely critical and fundamental in terms of how your business will be achieving goals and generating value. 

Check out Business Kitz’ subscription service today to access our full range of legal, commercial and employment documents to begin your business with a solid foundation that ensures compliance.

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If you are unsure about how to best protect yourself and your future business, our sister company, Legal Kitz can assist you. To arrange a FREE consultation with one of their highly experienced solicitors, click here today, or contact us at info@legalkitz.com.au or 1300 988 954.

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