Regardless of whether you’ve just set up a business or have been operating for years, with a business plan, you’ll enjoy great benefits and greater control over your operations and assets. Interested in how to create a business plan that best suits your organisation and goals? Read on for some helpful information.
What is a business plan?
The name says it all – a business plan is a plan for your business. But it’s more than that. A business plan offers you a comprehensive guide as to how to manage your business operations, what your goals are, and what steps you and your team will take to reach them. Business plans can be designed to be used among your team, or they can be presented as an overview to your clients or as a pitch to potential investors.
Why is a business plan important?
Planning can set you in great stead for the future, and a business plan carries great benefits. It will help you nut out your priorities, goals, and objectives, giving you the knowledge to prepare for any obstacles that might come your way. It will afford you greater control over those areas of business that might impact your success and can give seasoned business owners the space to step back and assess what’s working and what needs to be tweaked. And if you’re seeking finance, a business plan will show your chosen bank or investors why they should make an investment in your business.
Where do I start?
If you’re wondering how to create a business plan, the best place to start is by asking questions. Understanding the purpose and objectives of your business will help direct where you’d like it to go. You might like to consider:
- the purpose of your business, and why it’s operating
- any potential external investors
- the size you’d like to be
- your target clients
- any staff or partners
- your exit strategy
The Australian Taxation Office provides helpful templates which can help make this process easier. Try their Business Plan Template if you’re creating an in-depth plan or seeking finance. If you want to do some quick goal-setting, the Lean Business Plan Template is a great tool.
What should my business plan include?
Business plans are about quality, not quantity. They don’t need to be lengthy documents. They just need to clearly express and meet the needs of your business. Whatever the length of your plan, it should include the following elements:
- Executive summary: This is key to every business plan, and serves as an introduction.
- Company overview: This section offers the background and history of your business, and any mission statement you might have.
- Product of service information: This section describes what your company does – what you make or sell, or what services you offer. In this section, it’s important you emphasise the benefits of your products or services.
- Marketing or sales plan: In this section, provide details of your target demographics and how you can reach them. This might be through pricing, promotion, and maintaining customer relationships.
- Financials: This section provides the information investors need to make a decision as to whether or not to invest. It should include a five-year financial forecast, income statement, balance sheet, cash flow statement, and capital expense expectations.
- Gravitational team: Summarising your business hierarchy will help strengthen your company bio and indicate any key players.
What should I include in my executive summary?
Every business plan needs to include an executive summary. This is your first opportunity to grab the reader, so it’s important your summary is clear and to the point. The purpose of the executive summary is to deliver information that’s relevant and meaningful to your business and goals. It should cover:
- Why your expertise offers the best solutions in your field
- Why it’s worthwhile taking part in your focus area
- Why your firm is in a great position to meet the needs of the market.
When drafting your business plan, make sure it expresses the voice and feel of your business. You want the reader to really get a sense of who you are and what you do.
How do I prepare my finances?
A strong financial summary will convince investors they should become partners in your business, and will also indicate your financial health and position. You’ll need to indicate how much money you have, how much you’ll need as part of your plan, and how much you expect to generate as a profit. Funding can really come in handy, especially if you run into an unexpected expense, but it’s also important to avoid asking for more than you’ll need.
What about my business structure?
An accountant can work with you to develop the best structure for your business plan. Some common structures include:
- Sole-trader: a low-cost option with you solely responsible for the income, expenses and debts.
- Partnership: another low-cost option, controlled by two or more people sharing profits determined by percentages.
- Company: a model consisting of set ownership rules, and encouraging growth as ownership can be easily transferred without any impact on registrations.
- Discretionary trust: a flexible model ideal for a family-owned business. Individuals can come and go without changing the trust, and allocations of profit can be adjusted annually.
- Self-managed super fund: a model giving owners autonomy over their retirement investments, and which delivers low taxation if it’s well managed.
Business advice by the experts at Carbon Group
With the help of an accounting professional, like our team at Carbon Group, you’ll develop a well-researched and well-prepared business plan that ticks all the boxes. Our accountants are on hand to help you with all your accounting, taxation, bookkeeping, financial and insurance needs – and more. We’ll take the hassle and the headache out of coordinating the finances, so you can focus your time and energy where you want to be – meeting your goals and achieving success. Contact us today on 1300 454 174 or via our website to arrange a free consultation.