Business planning explained
Most business plans are produced for a specific reason and the most common by far is to raise finance. However, a well thought out and well written business plan is essential for every company, not just those seeking an investor or a lender. Indeed, the discipline of writing something down is the first step to making it happen. Without one, a business will under perform and risk failure. Learn about the reasons why you need to have a business plan.
The harsh reality is that most companies and most business plans fail. Four out of five new start-ups fail, and two out of three fail within their first 12 months. At any one time, 80% of companies are struggling to survive, 15% are doing ok and only 5% are excelling.
There are many reasons why companies struggle, but the most common reasons are:
- Inadequate time and effort devoted to strategic and business planning, if any at all
- The absence of a business plan
- Lack of cash due to poor cash flow management
Discover the reasons why companies fail.
A well thought out and well written plan:
- Provides clarity, focus and a blueprint for running your business
- Improves business performance
- Is mandatory to secure external investment
Those companies and entrepreneurs that are willing to invest the necessary time and effort to develop a compelling business plan significantly increase their chances of success and stepping up to become a high performing company. The ability to stand out from the mediocre masses is crucial when seeking external investment especially in an environment where the banks are effectively closed for business and where business angels fund less than 5% of the business plans they see. Also remember that banks (security) and business angels (capital growth) have very different investment needs.
Apart from the excellence of their business plans, high performing companies share five common traits that differentiate them from the vast majority of other companies that struggle. These are:
- A clear vision, a well-honed strategy and focused action plan for each step necessary to turn vision into reality
- A compelling value proposition where their products and services offer distinctive benefits that solve real customer needs at a price the core target market is prepared to pay
- An effective marketing strategy that ensures their core target market customers are aware of their product or service, its unique selling point (benefit), and enables the customer to navigate easily from first purchase to repeat purchase to loyalty to advocacy and referral
- A business plan that is superbly communicated to potential investors, employees and suppliers
- Excellence in execution – however brilliantly conceived, a business plan is useless unless a company excels in execution
The business plan itself sets out:
- What your business is about
- How it is performing
- What you are trying to achieve
- How you will achieve it
Learn more about how to write a compelling business plan and some do’s and don’ts.
The best business plans focus not only on content excellence but also excellence in presentation. A text heavy tomb, however well conceived and crafted, lacks impact and stand out, unless careful thought is given to how the content is presented. So bring your plan to life by including diagrams, pictures, graphs, tables and plenty of white space.
Many companies and entrepreneurs find it difficult to pin point exactly what they are trying to achieve and what is necessary to make it happen. For others, what is crystal clear in their heads often becomes a jumbled muddle when attempting to capture it succinctly on paper. The task can become daunting especially when fighting insufficient hours in the day and the pressure of the running a business.
To discuss your business critical issue
Please call Paul New on 020 8390 9972 or 07790 501225 or send a message.
