Does a Small Business Need a Business Plan?

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No matter the size of your business, a suitable plan must be in place which outlines the company’s basic objectives and how they can be achieved within a certain timeframe. This plan should determine your long term goals and can be referred to throughout your journey as the business owner.

Traditionally, a business plan follows a specified template and often includes the following main aspects:

  • Vision – What you’d like the business to ultimately be achieving, i.e. to become the leading supplier of beach towels in the UK.
  • Product Brand – How you plan on creating a unique and attractive product brand, i.e. to design a distinctive company logo or reach a particular demographic.  
  • Objectives – Descriptions of the company’s objectives, i.e. to increase profit margin year on year.
  • Strategies – Your approach to fulfilling the company objectives – i.e. invest in money-saving technology to decrease costs.
  • Financial Projections – Summary of costs against income and balance sheet projections – i.e. details on your expected profit margins over a specific time frame.  

There are many other areas which a business plan can look at, such as social media considerations and industry competition. They can be as detailed as you like, although each plan should be unique and relevant to the independent aims of your company.

Benefits of a Business Plan

Even small businesses need a designated plan in place before they begin trading. It provides a great platform for your company to refer to when considering your next move. Further benefits include:

Staying on Course – The business world can throw up some unexpected changes and affect your thinking on a number of issues. By creating and sticking to a designated business plan, you are less likely to veer off your original aims or succumb to unreliable market trends.

 

Cash Flow Management – By listing your intended expenses before trading starts, including equipment costs and tax payments, your cash flow management will become more efficient. Business plans should also estimate sale volumes and expected income also, although it is best to remain on the conservative side when it comes to this.  

Appearance – Business can all be about appearance and maintaining a high degree of professionalism at all times. If your line of work requires correspondence with other companies or important clients, having a thorough and sound business plan in place will create a professional appearance.

 

Investment – Many start-ups will require a cash boost to help them get off the ground, especially in regards to smaller companies. When looking for a bank loan for example, a sensible and detailed business plan will be required to secure funding and help arrange a repayment plan.

Ongoing Support – When the company is up and running, the business plan is a great document to keep referring to when tracking results and looking for guidance, not only for yourself but for any staff also.

If you enjoyed this blog post then perhaps you would like to read “The Pros and Cons to Renting Products and Services for Your Small Business“?

 

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Posted in Small Business Advice

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