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Why you need a business plan


A blueprint for your business

Think of it this way – you wouldn’t build a house without an architectural plan would you? It’s the same with your business. If you want to achieve a successful start-up and attain growth goals, you need a plan to do it.

A business plan outlines your strategies. You’ll need it for finance applications, for presenting to potential investors, and as a road map for the growth of your business. It’ll give you a clear sense of direction, as well as providing a benchmark so you can measure your business progress. You’ll also want to show your business plan to key staff, because it’s important they’re aware of your goals. It’s a way to keep everyone on the same trajectory and working towards the same things.

Writing your business plan

What you want to do is keep your plan short and sweet. If you overload it with detail or make it too long, it’ll become cumbersome and difficult to follow – thus defeating the purpose. The process of writing your plan will help you focus, focus your ideas and identify priorities, saving both time and effort. Rather than starting with a blank Word document, use a business plan template.

When writing your plan, keep the following in mind:

• Your products or services – describe what you’re selling without using too much technical jargon.
• Market, competition and customers – describe your market, key competitors and customers. Include an ideal customer profile.
• Marketing strategy – outline your marketing plans, including your position in the marketplace, your pricing strategy and promotional ideas.
• Finances – a break even analysis and cash flow forecast are essential.
• SWOT analysis – it only needs to be one page, but it’s helpful to have identified your strengths, weaknesses, opportunities and threats.
• Goals – include short and long term goals, as well as the timeline you’re projecting to achieve them.

Above all, keep your business plan realistic. For example, unrealistic sales forecasts could lead to increased overheads followed by a damaging cash flow crisis and drastic cost cutting. It could also damage your credibility, because lenders and other interested parties will quickly see through optimistic plans that ignore weaknesses or threats. Once your business plan is written, keep it close at hand. Review it regularly so you know you’re staying on target with your goals, and update it when necessary. Don’t make the mistake of ignoring it once your business is through the start-up phase. Revising and updating your plan will keep it relevant as a roadmap for your business.

Learn more about Small Business Banking at Meridian

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