Business development · 25 April 2017

Why it might be wise to rip up your old business plan

Why it's important to have a business plan
Why it’s important to have a business plan

Creating a business plan won’t guarantee success, but it’s important to have one to give your business its best shot. Here’s a guide on how to put one together.

A good business plan is a concise yet comprehensive document outlining your business, its market and its objectives.

KPMG Small Business Accounting has put together some pointers on how to draft your first business plan. Crucially, it should be a living document – you don’t just create one when you’re starting out and forget about it. Your plan should adapt as your market and objectives are always in flux.

Bivek Sharma, head of KPMG Small Business Accounting, said: “It should engage and inspire. It should tell the story of a business with a bright future – the opportunity should be obvious.”

What is a business plan?

A business plan usually covers a time period of around three years, and is around ten to 20 pages for smaller firms.

It should feature:

• An executive summary
• Aims and strategy
• Business description
• Operations information
• Organisation and management
• SWOT analysis
• Market description
• Marketing and sales strategies
• Financial information
• Funding requirements

Putting this information together can help you think more clearly about your aims and objectives, and how to tackle any challenges.

Don’t get caught out

There are some common mistakes when it comes to creating a business plan. The first is ignoring them altogether – either by not writing one, or writing one at the start and never looking at it again. It should be a tool to help you grow your business, every step of the way.

According to Sharma, some businesses go the other way, and create business plans with reams and reams of pages.

“They’re crammed with too much information and they can be difficult to understand,” he said.

“Others are too short, which makes it look like there isn’t much to say or that the owner hasn’t devoted enough time to writing their business plan. Business plans should read well and look professional throughout.

Lastly, all the financials need to be able to withstand close scrutiny. If your numbers don’t add up, the document is at best meaningless, and at worst misleading. If you’re looking for funding, get the numbers right first time.

But really, this is just the beginning. For more tips and advice on how to create a truly professional business plan,
take a look at this guide from KPMG Small Business Accounting.

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ABOUT THE EXPERT

Letitia Booty is a special projects journalist for Business Advice. She has a BA in English Literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.

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