GUIDE

PREPARE A BUSINESS PLAN FOR GROWTH

Planningiskeytoanybusinessthroughoutitsexistence.Everysuccessfulbusinessregularlyreviewsitsbusinessplantoensureitcontinuestomeetitsneeds.
It'ssensibletoreviewcurrentperformanceonaregularbasisandidentifythemostlikelystrategiesforgrowth.
Onceyou'vereviewedyourprogressandidentifiedthekeygrowthareasthatyouwanttotarget,it'stimetorevisityourbusinessplanandmakeitaroadmapto
thenextstagesforyourbusiness.
Thisguidewillshowhowyoucanturnyourbusinessplanfromastaticdocumentintoadynamictemplatethatwillhelpyourbusinessbothsurviveandthrive.

Theimportanceofongoingbusinessplanning
Whatyourbusinessplanshouldinclude
Drawingupamoresophisticatedbusinessplan
Planandallocateresourceseffectively
Usetargetstoimplementyourbusinessplan
Whenandhowtoreviewyourbusinessplan

THE IMPORTANCE OF ONGOING BUSINESS PLANNING

Mostpotentialinvestorswillwanttoseeabusinessplanbeforetheyconsiderfundingyourbusiness.Althoughmanybusinessesaretemptedtousetheir
businessplanssolelyforthispurpose,agoodplanshouldsetthecourseofabusinessoveritslifespan.
Abusinessplanplaysakeyroleinallocatingresourcesthroughoutabusiness.Itisatoolthatcanhelpyouattractnewfundsorthatyoucanuseasastrategy
document.Agoodbusinessplanrevealshowyouwouldusethebankloanorinvestmentyouareaskingfor.
Ongoingbusinessplanningmeansthatyoucanmonitorwhetheryouareachievingyourbusinessobjectives.Abusinessplancanbeusedasatooltoidentify
whereyouarenowandinwhichdirectionyouwishyourbusinesstogrow.Abusinessplanwillalsoensurethatyoumeetcertainkeytargetsandmanage
businesspriorities.
Youcanmaximiseyourchancesofsuccessbyadoptingacontinuousandregularbusinessplanningcyclethatkeepstheplanuptodate.Thisshouldinclude
regularbusinessplanningmeetingswhichinvolvekeypeoplefromthebusiness.
Tofindoutmore,seeourguidesonhowtoreviewyourbusinessperformance(http://www.infoentrepreneurs.org/en/guides/reviewyourbusinessperformance/)and
howtoassessyouroptionsforgrowth(http://www.infoentrepreneurs.org/en/guides/assessyouroptionsforgrowth/).
Ifyouregularlyassessyourperformanceagainsttheplansandtargetsyouhaveset,youaremorelikelytomeetyourobjectives.Itcanalsosignpostwhereand
whyyou'regoingastray.Manybusinesseschoosetoassessprogresseverythreeorsixmonths.
Theassessmentwillalsohelpyouindiscussionswithbanks,investorsandevenpotentialbuyersofyourbusiness.Regularreviewisagoodvehicleforshowing
directionandcommitmenttoemployees,customersandsuppliers.
Definingyourbusiness'purposeinyourbusinessplankeepsyoufocused,inspiresyouremployeesandattractscustomers.

WHAT YOUR BUSINESS PLAN SHOULD INCLUDE

Yourbusinessplanshouldincludeasummaryofwhatyourbusinessdoes,howithasdevelopedandwhereyouwantittogo.Inparticular,itshouldcoveryour
strategyforimprovingyourexistingsalesandprocessestoachievethegrowthyoudesire.
Youalsoneedtomakeitclearwhattimeframethebusinessplancoversthiswilltypicallybeforthenext12to24months.
Theplanneedstoinclude:
Themarketingaimsandobjectives,forexamplehowmanynewcustomersyouwanttogainandtheanticipatedsizeofyourcustomerbaseattheendofthe
period.Tofindoutaboutmarketingstrategy,seeourguideonhowtocreateyourmarketingstrategy(http://www.infoentrepreneurs.org/en/guides/createyourma
rketingstrategy/).
Operationalinformationsuchaswhereyourbusinessisbased,whoyoursuppliersareandthepremisesandequipmentneeded.
Financialinformation,includingprofitandlossforecasts,cashflowforecasts,salesforecastsandauditedaccounts.
Asummaryofthebusinessobjectives,includingtargetsanddates.
Ifyoursisanownermanagedbusiness,youmaywishtoincludeanexitplan.Thisincludesplanningthetimingofyourdepartureandthecircumstances,e.g.
familysuccession,saleofthebusiness,floatingyourbusinessorclosingitdown.
Ifyouintendtopresentyourbusinessplantoanexternalaudiencesuchasinvestorsorbanks,youwillalsoneedtoinclude:

youraimsandobjectivesforeachareaofthebusiness
detailsofthehistoryofthebusiness,includingfinancialrecordsfromthelastthreeyearsifthisisn'tpossible,providedetailsabouttradingtodate
theskillsandqualificationsofthemanagementinvolvedinyourbusiness
informationabouttheproductorservice,itsdistinctivenessandwhereitfitsintothemarketplace

DRAWING UP A MORE SOPHISTICATED BUSINESS PLAN

Ifyourbusinesshasgrowntoencompassaseriesofdepartmentsordivisions,eachwithitsowntargetsandobjectives,youmayneedtodrawupamore
sophisticatedbusinessplan.

Theindividualbusinessplansofthedepartmentsandseparatebusinessunitswillneedtobeintegratedintoasinglestrategydocumentfortheentireorganisation.
Thiscanbeacomplexexercisebutit'svitalifeachbusinessunitistotreadaconsistentpathandnotconflictwiththeoverallstrategy.
Thisisnotjustanissueforlargeenterprisesmanysmallfirmsconsistofseparatebusinessunitspursuingdifferentstrategies.
Todrawupabusinessplanthatmarriesalltheseparateunitsofanorganisationrequiresadegreeofcoordination.Itmayseemobvious,butmakesureall
departmentsareusingthesameplanningtemplate.
Objectivesforindividualdepartments
It'simportantforeachdepartmenttofeelthattheyareastakeholderintheplan.Typically,eachdepartmentheadwilldrafttheunit'sbusinessplanandthenagree
onitsfinalforminconjunctionwithotherdepartments.
Eachunit'sbudgetsandprioritiesmustbesetsothattheyfitinwiththoseoftheentireorganisation.Generally,individualunitplansarerequiredtobemore
specificandpreciselydefinedthantheoverallbusinessplan.It'simportantthattheobjectivessetforbusinessunitsarerealisticanddeliverable.However
complexitturnsouttobe,theindividualbusinessunitplanneedstobeeasilyunderstoodbythepeoplewhosejobitistomakeitwork.Theyalsoneedtobe
clearonhowtheirplanfitsinwiththatofthewiderorganisation.

PLAN AND ALLOCATE RESOURCES EFFECTIVELY

Thebusinessplanplaysakeyroleinallocatingresourcesthroughoutabusinesssothattheobjectivessetintheplancanbemet.
Onceyou'vereviewedyourprogresstodateandidentifiedyourstrategyforgrowth,yourexistingbusinessplanmaylookdatedandmaynolongerreflectyour
business'positionandfuturedirection.
Whenyouarereviewingyourbusinessplantocoverthenextstages,it'simportanttobeclearonhowyouwillallocateyourresourcestomakeyourstrategywork.
Forexample,ifaparticularbusinessunitordepartmenthasbeengivenatarget,thebusinessplanshouldallocatesufficientresourcestoachieveit.These
resourcesmayalreadybeavailablewithinthebusinessormaybegeneratedbyfutureactivity.
Inpracticethiscouldmeanrecruitingmoreofficestaff,spendingmoreonmarketingorbuyingmoresuppliesorequipment.Youmaywanttoprovidefundsthrough
currentcashflow,generatingmoreprofitorseekingexternalfunding.Ingeneral,itisalwaysbettertofundfuturegrowththroughrevenuegeneration.
However,youshoulddosomeprecisebudgetingtodecideontherightlevelofresourcingforaparticularunitordepartment.It'simportantthatresourcesare
prioritised,sothatareasofabusinesswhicharekeytodeliveringtheoverallaimsandobjectivesareadequatelyfunded.Iffundingisn'tavailablethismayinvolve
makingcutbacksinotherareas.

USE TARGETS TO IMPLEMENT YOUR BUSINESS PLAN

Asuccessfulbusinessplanshouldincorporateasetoftargetsandobjectives.
Whiletheoverallplanmaysetstrategicgoals,theseareunlikelytobeachievedunlessyouuseSMARTobjectivesortargets,i.e.Specific,Measurable,
Achievable,RealisticandTimely.
Targetshelpeveryonewithinabusinessunderstandwhattheyneedtoachieveandwhentheyneedtoachieveit.
Youcanmonitortheperformanceofemployees,teamsoranewproductorservicebyusingappropriateperformanceindicators.Thesecanbe:

salesorprofitfiguresoveragivenperiod
milestonesinnewproductdevelopment
productivitybenchmarksforindividualteammembers
marketsharestatistics

Targetsmakeitclearerforindividualemployeestoseewheretheyfitwithinanorganisationandwhattheyneedtodotohelpthebusinessmeetitsobjectives.
Settingclearobjectivesandtargetsandcloselymonitoringtheirdeliverycanmakethedevelopmentofyourbusinessmoreeffective.Targetsandobjectives
shouldalsoformakeypartofemployeeappraisals,asameansofobjectivelyaddressingindividuals'progress.

WHEN AND HOW TO REVIEW YOUR BUSINESS PLAN

Onceyou'vedrawnupyournewbusinessplanandputitintopractice,itneedstobecontinuallymonitoredtomakesuretheobjectivesarebeingachieved.This
reviewprocessshouldfollowanassessmentofyourprogresstodateandananalysisofthemostpromisingwaystodevelopyourbusiness.Tofindoutmore
aboutthesestagesseeourguidesonhowtoreviewyourbusinessperformance(http://www.infoentrepreneurs.org/en/guides/reviewyourbusinessperformance/)
andhowtoassessyouroptionsforgrowth(http://www.infoentrepreneurs.org/en/guides/assessyouroptionsforgrowth/).
Thisprocessiscalledthebusinessplancycle.Insomebusinesses,thecyclemaybeacontinuousprocesswiththeplanbeingregularlyupdatedandmonitored.
Formostbusinesses,anannualplanbrokendownintofourquarterlyoperatingplansissufficient.However,ifabusinessisheavilysalesdriven,itcanmake
moresensetohaveamonthlyoperatingplan,supplementedwherenecessarywithweeklytargetsandreviews.
It'simportanttokeepinmindthatmajoreventsinyourbusiness'targetmarketplace(e.g.competitorconsolidation,acquisitionofamajorcustomer)orinthe
broaderenvironment(e.g.newlegislation)shouldtriggerareviewofyourstrategicobjectives.
Regardlessofwhetherornottherearefixedtimeintervalsinyourbusinessplan,itmustbepartofarollingprocess,withregularassessmentofperformance
againsttheplanandagreementofarevisedforecastifnecessary.

Originaldocument,Prepareabusinessplanforgrowth,Crowncopyright2009
Source:BusinessLinkUK(nowGOV.UK/Business(https://www.gov.uk/business))
AdaptedforQubecbyInfoentrepreneurs

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