Starting a business plan can be a daunting experience and finishing one is even harder – so make sure you are prepared by bearing in mind the following points.
1 – Be very clear on the purpose of your business plan
Make sure you know exactly why you are writing a business plan and what you want it to achieve for you. If you are not clear about this the chances of your business plan succeeding for you are slim.
So write down what you want your business plan to do: raise funds, persuade a partner etc (your business plan may have several purposes) and then work with these purposes always present in your mind.
2 – Ask yourself, “who will read the business plan?”
Part of deciding what you want your business plan to achieve is deciding who your ‘audience’ is, in otherwords, who do you want to read your business plan. If you want to use it as internal planning document then you may include more detail about how your enterprise works, complete with detailed action plans than you would if the audience was an external lender who was mainly interested in seeing that you would be able to make enough money to pay your loan back.
However, despite the fact that we are talking about two different audiences, this does not mean that you will have to go through the process twice. What you can do is write your business plan as an internal document first and then save this and continue with an amended version that condenses some parts and emphasises others before you send it to your funder or lender.
As you progress, try reading what you have written as if are one of your target audiences – remember you are writing to convince them, not you!
3 – What period of time will your business plan cover?”
Decide the period of time your business plan will cover. Often people say a business plan should cover between 3 and 5 years, although for the vast majority of people 1 year is more than enough! If you are a new enterprise or are expecting to change significantly as an organisation then a business plan covering a shorter length of time may well be best for you.
So much could change with your enterprise that predicting five years ahead become more and more tenuous. If the changes you are making are likely to be more gradual or you are looking to start a big project such as a new build or major refurbishment a 5 year plan might be appropriate.
4 – Your writing style – use of language
Another thing to note before you start writing anything: try to minimise the amount of jargon or technical language you use. You should not assume that the people reading your business plan understand as much as you do about your enterprise – in fact, it is best to assume they know nothing about what you are doing by taking the time to explain everything and by choosing your language carefully.
This is also the case for a business plan that is going to be an internal document. Imagine you have recruited a new member of staff who knows nothing about your organisation or the work that you do; see the business plan as a document that would help them to learn about who you are, what you do and what your plans are for the future.
Do not try to use ‘management speak’ or complex phrasing when simple wording will do – remember your business plan is about putting over your arguments and no amount of pretty graphs or flowery language will hide muddled thinking. So keep the structure of your business plan clear, keep your logic clear, your research and assertions rock solid and your writing style straightforward.
Please note that we are not saying your business plan should be simplistic, far from it – use language to build your business argument, no matter how complex – but let the argument be in the front of the reader’s mind, not your choice of words.
5 – Confidentiality
Depending on what you put in your plan it may be sensible to protect your ideas by at least making it clear to your readers that you do not want them to tell others. If you feel this is the case make sure you include some sort of confidentiality statement on the front of the business plan before it leaves your desk.
6 – How long should a business plan be?
There is no set answer to this question; it really does depend on your enterprise. You do not want it to be too short because then you may not have given yourself enough space to explain everything in detail. Neither should it waffle (be ruthless in cutting out waffle). So, don’t worry about length, concentrate on writing up your business case properly and that will be the right length of your business plan.
Using Appendices at the back of a business plan are really helpful for keeping the number of pages down because you can put in them any additional information that is taking up space in the main body of the business plan. All sorts of information can be included in the Appendices – have a look at that section in these Help files for ideas of what you could include.
But if we had to decide on an ‘average’ length we suggest that you aim for no more than around 20 pages, not including your Appendices. You may come in under or over that number, and that does not matter – you will get a sense of whether you have written enough and really made your plans clear.
7 – Checking the business plan before releasing it
We would suggest that once your business plan is complete you ask people inside and outside of your organisation to read it through. For example, you could ask an accountant or financial advisor to look at the financial section, or someone with experience in marketing to look at the research and marketing sections. Even a friend or member of your family could give some useful feedback about how easy it is to understand and avoids using jargon.
And remember, what may seem obvious to you as the author may well be unclear to the reader to be prepared to rewrite again and again!