3 steps to the ultimate business plan » SMEInsider

3 steps to the ultimate business plan

Last week, a study carried out by Close Brothers Asset Finance discovered that nearly half of SMEs did not have a business plan.

A business plan is one of the most important tools a prospective business-owner can have. A great business plan can be the cornerstone of a great company.

Here are 3 ways in which you can make a great business plan.

1. Consider the risks.

It is perfectly natural to have a great idea and become convinced it’s too good to fail. You should be prudent: take your time and address the risks. Ask yourself simple questions: ‘is there a demand for my product?’ It is important to follow through on the questions and hypothetical problems you set for yourself. If there is demand, you should then ask yourself if there is anything that could threaten that demand. Another company? A change in legislation. If you are aware of the risks you can start working on how to minimise them.

2. Know your product.

This carries on nicely from the first tip. You should know your prospective market inside out. Which company is the dominant force? What startup could cut you off? Pricing is crucial. You have to work out what is the price of your rivals’ products; what the manufacturing/distribution costs are. Can you charge less and make a profit? Can you charge more but produce higher quality product?  All of this will inform what you ultimately can and should charge.

3. Ensure the plan is clear and precise.

This will be essential if you are seeking investment. Nobody wants to see a long and convoluted business plan. Hone in on the most important and relevant aspects of your business idea. If you are presenting to investors, ensure your presentation is well polished and professional looking. Your plan has to instil confidence in potential investors.