7 Things You Need To Do Before You Write a Business Plan

Producing a Business Plan – or getting it done for you – is a big decision.

(And if you are in any doubt as to why you need one, read this blog post which explains Why You Need a Business Plan).

However, it can be frustrating if you understand how important it is and have made the call to get it done, but find yourself woefully unequipped for the task ahead.

Doing the planning in your business requires commitment, and is an investment of your time. To make sure you have everything you need to start and complete the task, here are the 7 things you need to do before you write a Business Plan.

1. Know Your Business

I know this sounds patronising.

After all, who knows your business better than you?

I assure you it isn’t meant to be.

The point I’m making is that, as well as being able to give an overview of your business, you must be able to articulate aspects such as the central idea behind it, your mission and objectives, and who your main competitors are.

You must know have the fundamental and foundational information about your business at your fingertips.

2. Study The Market

What is the current state of the market you operate in?

Is it primed for growth?

Is it fairly stable, or is it in decline?

Are there any notable underlying trends?

What is the demand in the market, and how do your products or services meet that demand?

What’s your Unique Selling Proposition, and are there any gaps in the market which you intend to fill?

As you prepare to write your Business Plan, you need to do some preliminary research about the state of the market you will operate in, so you can ensure you are best placed to do so.

3. Identify Your Target Audience

Which segment of the market have you designed your products and services for?

As an example, are you targeting men or women? Or, are your products and services suited to both genders?

If your target audience is women, are you focused on career women, or stay-at-home mothers?

Are your products and services geared towards people within a certain age range?

Are they based in cities, suburban or rural areas?

Are they early adopters or technophobes?

What are their problems, and which of these will you solve with your products and services?

These are some of the questions which must frame your offering. And answering them is crucial, because sometimes it’s easy to forget that our products and services are not necessarily meant to meet OUR needs.

Your products and services have to meet the needs of your target audience. Always remember that your success is dependent on solving their problems.

4. Think About Your Pricing, Marketing and Sales Strategies

Take the time to think about your pricing strategy.

Most of the time, people think this involves plucking a price out of the air, but there’s more to it than that!

How much does each unit cost to produce, and what margin will the market tolerate on top of that?

How does that then match your expectations for income and profit?

Then, you need to think about how to market and sell products and services.

Social media makes advertising and marketing more accessible but bear in mind that what works for a similar business may not necessarily work for yours.

So, do a bit of research, and have some intentions for how you will conduct your sales and marketing campaigns. Brainstorm some ideas about how you will price, market and sell your products and services.

5. How Will You Measure Your Success?

“Measure your success” sounds boring, I know!

But as they say, anything that is measured and watched improves.

That’s why you need to work out how to do this in advance.

If you don’t, how will you know what you’re working towards?

And more importantly, how will you know when it happens?

It doesn’t have to be complicated to assess or calculate. But you do need to key metrics in place to understand how your business is performing.

6. Plan Your Finances

This part can be easy to skip, but is probably the most important of all.

You need a certain amount of cash to run your business every month. Sum up your expenses (and don’t forget to include your salary).

What does the total come to? That’s the amount you need to have available. Not invoiced and waiting to be paid; actual cash in the bank. Anything less, and you immediately have a cash flow problem.

Many a business was successful on paper and in terms of invoiced amounts, but ended up filing for bankruptcy because it simply couldn’t meet its obligations when they were due.

Another key point to address is the length of time you think it will take to make a profit.

It’s not unusual for some businesses not to make a profit for some months, or even years. As long as you know that upfront and are prepared for it, it’s not a problem.

But if that’s the case, do you have an idea of what the losses will come to each month? How will this be funded, and how long can you sustain that?

In my experience people either don’t plan for these scenarios, or are far too optimistic with their figures. It’s better to err on the side of caution and make too much provision, than to fall short and find yourself at a loose end.

7. Don’t Be Intimidated By Your Business Plan!

And finally, don’t be intimidated!

Where I’ve recommended doing research, please don’t think it has to be onerous.

Ask your family and friends.

Use the internet.

Create a poll using SurveyMonkey or Google Polls.

Some professional bodies – such as the Institute of Directors – offer research sessions which you can access as part of their membership.

If you belong to a professional body, check to see if they can help you do some. They may have done something similar already and have some statistics you can use.

What Are the Next Steps?

If you need help with your Business Planning, I have designed some tools that can help:

The first is a One Page Business Plan Template.

It’s short and concise, while containing all the essential elements you need in a Business Plan.

And in addition, it contains helpful prompts which will guide you along the process.

You can buy and download your copy of the One Page Business Plan Template here.

The second is a comprehensive Business Plan Template, which contains all the sections and details you would find in a typical Business Plan such as the Product & Service Range, Target Audience, Market Analysis, Milestones & Metrics, and Financials.

Similar to the first template above, it also has helpful prompts to guide you as you complete it and produce your Business Plan. You can buy and download your copy of the Business Plan Template here.

And finally, I provide a done-for-you Business Planning Service.

If you would like to produce your Business Plan but can’t commit the time to do it yourself, you don’t have to worry! Contact me about my Business Planning Service, and we can arrange to get started on yours as soon as possible.