Ensuring your business is moving in the right direction is incredibly important for all business owners. Particularly so for small businesses where the owner may take on multiple roles. Which means it can be very easy to focus on the ‘here and now’ and not so much on the future.
This where a business plan can be useful. It can help show you how to grow the business, make more money and even save tax.
What is a business plan?
In its simplest form a business plan is a list of business goals and details on how to achieve these goals.
Historically, business plans were long documents detailing every facet of the business. However, luckily for us they have become shorter, simpler and easy to complete. In fact, it can be as simple as a few bullet points. However, the more detail you can put down the better it will be.
A further point to bear in mind is that a business plan is not written in stone and it should be revised as the business grows organically.
Who needs a business plan?
Whether you need a business plan depends on what you are doing. If you are planning on doing some freelance work alongside your paid position, then maybe not.
However, if you are thinking of turning your side-gig into a full-time freelance position, then you should be thinking of putting together a business plan.
Whether your business is relatively new, or it has been trading for a while, a business plan can add benefit.
However, a survey carried out by Barclays Bank found that one in four small businesses have not put together a business plan.
Reasons cited for not having a plan included:
- ‘not feeling it is necessary’
- ‘I prefer to keep my plans in my head’
- ‘it is not a priority’
Why you need a business plan
Creating a business plan for your business will help you to focus and steer your business in the right direction.
Furthermore, it can:
- help you understand your business more
- spot areas of past failures
- identify areas that need improvement and plan your next course of action
- help you understand the market your business works in a little more
- make it easier to decide if your business would benefit from external sources of funding
- allows you to see if any part of the business will benefit from external sources of help e.g. IT support
- identify areas where cost savings can be made
- help you set in place a cash flow management plan
- identify areas where tax savings can be made
- force you to think of an exit strategy e.g. pass the business onto a family member or sell it to a competitor
What to include in a business plan
To start 2018 off on the right foot, set out to write a business plan that includes:
- your strategy and steps you will take to accomplish them
- details of your product(s) or service and their USP’s
- markets you will target
- a list of external help you may need, including accountants, solicitors, business advisors and so on
- your financing needs
- deadlines and dates for the tasks within your strategy