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Why your local business needs a business plan and how to write one

“If you fail to plan, you are planning to fail” (Benjamin Franklin)

Every business, large or small, needs a plan, fact! A business without a plan is like a ship without a captain, drifting aimlessly from month to month, bemoaning the lack of progress and losing out to competitors offering substandard products or services.

A business plan is a detailed document that outlines a business’s goals, objectives, strategies, and financial projections and serves as a tool to clarify its vision, mission, and values so it can move forward. It helps them identify potential risks and opportunities, identify and understand their target market and competitors, and develop effective marketing and sales strategies. It also provides a framework for making informed financial decisions, including budgeting and forecasting.

In this article, we will explore why your local business needs a business plan and provide a step-by-step guide on how to write one. Whether you’re a start-up or an established business, a well-crafted business plan is an invaluable asset that can help you achieve your goals and take your business to the next level.

The benefits of having a business plan

A business plan is more than just a document that outlines a business’s goals and objectives, it’s a powerful tool that provides numerous benefits to a business and helps position it for success in a competitive market. 

  • Helps define the business goals and objectives: A well-crafted business plan with clearly defined goals and objectives establishes a sense of direction and purpose for your business, from which position you can make informed decisions, focus on what is important, and prioritise resources accordingly, to drive growth and success.
  • Provides a clear understanding of the target market and competitors: A business plan requires you to conduct market research and analyse your competition, which gives you a better understanding of your target market. By understanding your customers’ needs and preferences, you can identify any gaps or opportunities that exist and tailor your products or services to meet those demands, which gives you a competitive edge in the market.
  • Helps identify potential risks and opportunities: Identifying potential risks means you can anticipate potential obstacles and take proactive measures to mitigate them, such as developing contingency plans. Knowing the potential opportunities puts you in a better position to take advantage of them as and when they arise. 
  • Helps secure funding: All investors and financial institutions require a comprehensive business plan before considering investing in a local business. A well-crafted business plan that provides a clear understanding of the company’s financial projections, cash flow, and other key financial metrics helps instil confidence in your business, making it easier to raise capital or secure a loan.
  • Provides a roadmap for business growth and expansion: By outlining the steps needed to achieve your goals and objectives and identifying key milestones and metrics in your business plan, you can track your progress, making adjustments as needed. You can also plan for growth and expansion, ensuring you stay ahead of the competition.

Components of a business plan

Taking the time to create a comprehensive business plan can position your businesses for success and secure funding from investors and financial institutions, if necessary. And while the components can be tailored to the specific needs and goals of your business, most business plans include the following sections:

  • Executive Summary: This is always the first section of a business plan and provides a brief overview of the company’s mission, products or services offered, target market, financial projections, and other key information. Essentially, it is what it says it is, a summary of your entire business plan, and as such, it should be concise, clear, and compelling.
  • Business description: This section provides an in-depth look at your business, including its history, mission, values, and goals, along with information on the legal structure, such as whether it is a sole trader, partnership, or limited company.
  • Market analysis: This section examines your target market and competition, and should include information on market size, demographics, trends, and consumer behaviour, as well as an analysis of the competition’s strengths and weaknesses.
  • Products or services offered: This section is a detailed look at your offerings, features, benefits, and unique selling points (USPs). It should also include information on pricing, distribution channels, and any intellectual property or patents, whether pending or secured.
  • Marketing and sales strategy: You should include an outline of your plan for reaching and engaging with your target market, details on advertising, promotions, public relations, social media, and other marketing tactics, as well as sales forecasts and strategies for achieving those targets.
  • Management and organisational structure: Who are the key people in your business? You should detail their roles and responsibilities and provide an overview of your organisational structure, including any advisory boards or partnerships.
  • Financial projections: Arguably the most important component of any business plan because it provides an overview of the company’s financial performance, including revenue projections, operating costs, and cash flow forecasts. You should also include financial statements, such as balance sheets and income statements.
  • Appendices and supporting documents: This section includes any additional information that supports your business plan, such as market research reports, product or service catalogues, legal documents, and resumes of key people.

Top tip for writing a business plan

The following top tips will help you create a compelling business plan to position your business for success:

  • Keep it simple and concise: You’ve heard of the acronym ‘KISS’, haven’t you? KISS stands for ‘Keep It Stupidly Simple’, and is the most important thing to bear in mind when writing your business plan. Your plan should be easy to read and understand, so avoid using technical jargon or overly complicated language that may confuse your audience, and it should have a clear structure and well-organised sections. At the end of the day, a simple, straightforward plan is more likely to be read and understood by potential investors, partners, or lenders.
  • Back up your claims: If you make a claim in your business plan, you need to back it up with evidence. You can use market research and industry data to support your projections and assumptions and provide detailed financial statements and performance metrics to demonstrate the viability of your business. Using data and research to support your claims can help you build credibility with potential investors and lenders and increase the likelihood of securing funding or support.
  • Be realistic about your targets: As a business owner, it’s very easy to be overly optimistic about future growth when writing a business plan, especially if you’re looking for investment. Of course, you want your business to be successful, however, it’s important to be realistic and brutally honest about your revenue targets, growth projections, and potential risks and challenges, which demonstrates you have a clear understanding of the market and the challenges and opportunities that lie ahead Unrealistic assumptions can undermine your credibility and reduce the likelihood of securing funding or support. You only need to watch ‘Dragon’s Den’ to see the effect of outrageous claims and valuations!
  • Seek feedback: It’s always beneficial to get a second opinion! Another pair of eyes looking at your business plan, including from potential investors or partners, can help you identify blind spots or weaknesses so you can make necessary adjustments. Seeking feedback also demonstrates your openness to collaboration and willingness to listen to other ideas and suggestions.
  • Consider hiring a professional to help with the writing process: While it may require an investment, a professional writer or consultant can provide valuable insights and guidance to help you structure and organise your plan clearly and effectively, which saves you time and increases your chances of success.

Key takeaway

A solid, well-written business plan can make all the difference between success and failure, so never underestimate its importance. It can help you define your goals, understand your target market and competition, identify potential risks and opportunities, secure funding, and provide a roadmap for growth and expansion.

By following the steps and tips outlined in this article and taking your time, you can create a well-thought-out plan which should then be regularly reviewed and revised as your business continues to grow and evolve.

So, if you haven’t already, now is the time to start working on your business plan. Your business will thank you for it!

About Magic

Magic helps local businesses grow. Thousands of local businesses use Magic to get more online reviews, win new customers, easily manage customer conversations and grow sales. Magic offers these features:

  • Reviews: Get more reviews with automatic review requests for popular review sites like Google, Facebook, Yelp, TrustPilot, and more. Rank high on local search and enhance your visibility on Google. 
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