Do You Want to Improve Your Business Plan?
The initial business plan is often created before the company is even launched. Thereafter, it is commonly reviewed and updated on an annual basis. You probably already have a business plan in place but may be looking to enhance it. Here is a list of what the business plan should include and some tips on how to improve it.
The Content, Target Audience, and Purpose of the Business Plan
A business plan is the expression of your business idea in terms of business goals and is intended to provide direction for your company during the specified period. Therefore, you should consider your business plan as a decision support and guiding document. In a business plan, you address what your company will do, for whom, and how it will do it effectively while optimising revenue.
The reasons why you should do what you do (mission and vision), who will do what and how, can also be included. There are no specific rules regarding the structure of a business plan.
The business plan should include a plan to achieve the set goals and preferably an assessment of feasibility. Business Planning is closely related to Goal Management. Typically, there is also a description of the market, customers, and a clear link to the budget.
The plan should be based on an analysis of the current situation. For example, a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) can be used. It may also be valuable to conduct an environmental analysis to capture trends and other factors that affect your circumstances. The environmental analysis may include aspects such as the economy, market, politics, technological development, environment, legal framework, and media.
You don't work on the business plan solely for internal stakeholders. It can also be important for external stakeholders such as investors, potential investors, partners, customers, and authorities. Many external stakeholders appreciate robust risk management built on a solid risk analysis, and that this is continuously followed up with internal controls.
Internally, your business plan focuses on sub-goals that are derived from your company's overall goals. A sub-goal could involve building a factory or launching a product. Introducing the Balanced Scorecard can help structure and define non-financial goals for your company.
Financial goals and the work associated with them are usually managed using a budgeting and forecasting system, with the finance function of your company, including the CFO and controllers, as key personnel.
Business plans that identify long-term goals and strategic choices with more general guidelines for achieving them are called strategic plans. However, these can also be included within your business plan, which can be seen as a collection of strategy documents or as a strategy document.
Considerations when Improving Your Business Plan
- Having a solid analysis and supporting data is important for your business plan. However, your business plan will be based on certain assumptions. Minimise these assumptions as much as possible.
- Adjusting the business plan and goals should be done continuously. For example, the market or competition may change over time. Viewing your business plan as long-term (3-5 years) but subjecting it to regular reviews through analysis and insights makes it more flexible. You should consider trends and how customers or users perceive your product or service (how your value proposition is perceived).
- Decision-makers should have the right data to rely on when seeking new revenue streams or adjusting your business (and business plan). You may need a new situational analysis if circumstances have changed. You may also have projects that are complex enough to warrant their own business plans.
- Your business plan should have a clear structure that is easy to understand and communicate, making it easier for your company to achieve its business goals. Yes, this also means keeping it as concise as possible.
- Adjusting the financial forecast should also be done continuously. Initially, ensure that the budgeting process aligns with the Business Planning, and then consider using rolling forecasts to facilitate a more agile approach. Also, work on ongoing scenario planning.
- Avoid having too many goals to maintain focus on achieving your business goals. For example, Google utilises the goal-setting methodology of Objectives and Key Results, which recommends 3-5 goals and 3-5 ways to measure those goals at the company-wide, departmental, team, and individual levels.
- Having a tool for Goal Management is now a hygiene factor if you want to work systematically towards your goals and create alignment between strategy, plan, key metrics, and activities.
- Ensuring that the management team has time for revisiting and can focus, lift their gaze, and invest is a fundamental requirement for improving the company's business plan.
Hypergene's software provides decision support by collecting and presenting data from the organisation to executives, managers, and those responsible for Performance Management. Hypergene helps you make informed decisions, steer towards goals, and achieve higher levels of performance and efficiency.
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