Developing a business plan

Business planning requires that you have a vision of where you would like your business to be in five to ten years. But how do you plan to get from where you are today to where you want to be?

How will you know when you actually get there? Have you documented your plan and do you review it regularly?

Developing a business plan: how to get started

A business plan is the formal structure upon which to build your business. It enables you to document each stage of your businesses growth, make periodic assessments of each area of your business and make a smooth transition at each stage of growth.

This is true of any business, no matter what stage you are in your business cycle.

Just as all businesses are different, no two business plans are the same. Your plan must:

be tailored to your individual business;
be articulated clearly;
communicate the essential characteristics of your business so that interested parties can see why it is likely to be successful;
provide a framework to monitor and measure the actual performance of your business; and
be used as a guide to enable you to make sound business decisions.

A checklist for business plan preparation

Before you start your business plan answer these questions. Your answers should give you a thorough understanding of your business and the direction it should be taking.

Your product/service

What do you see as being the main applications and uses of your product/service?
Who will buy your product/service?
What trends do you anticipate for the product service usage?
Who do you see as your potential competitors?
Do these offer a wide range of products/services?
How will your product/service be differentiated from competitors?
What advantages and problems are associated with your product/service?
Do you see scope to expand the range of your product/service?
What price do you anticipate charging for your product/service?
What will it cost to supply your product/service?
How price sensitive do you believe demand for your product/service will be?

Your market

What is the current Australian market for your product/service?
What is the current overseas market for your product/service?
What problems do you anticipate entering the market?
Have you identified a niche in the market for your product/service?
What characteristics do you see this market niche having?
What characteristics do you see your customers having?
What are the trends in the market in terms of how they will affect your product/service's penetration?
What market share are you aiming for?
What are your anticipated distribution methods?
What other distribution methods are there or could there be?

Your competition

What are the strengths and weaknesses of your anticipated competitors?
What assumptions have you made about your anticipated competitors in relation to your proposed business?
In what form does competition exist in the market (e.g. price, discounting, service, promotion, technology)?
How well established are your anticipated competitors?
How important to your anticipated competitors is the product/service that you will be attacking?
What reaction do you anticipate from potential competitors when you launch your product/service?
How will you combat this?

Production/servicing/manufacturing aspects of your business

What methods are proposed to manufacture/produce or provide services for the market?
What technologies are required and how advanced are these?
What production servicing problems do you anticipate?
What do you anticipate as the critical factors associated with your production/manufacturing/servicing operations?
How important are these factors?
To what extent do you anticipate you could reduce the importance of these factors?

This article originally appeared on the Ask Us How website. NSW Business Chamber Members can access this site, which features hundreds of practical articles and other resources to help you manage and grow your business.