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Five questions to ask while creating a business plan

Your business plan is a map for the future of your venture.

Whether you're making a product, providing services, opening a restaurant or designing apps, your venture needs a business plan. Think of it as a map. Much like a set of directions, it'll describe your vision for the future of the business. In clear language, it should delineate how you'll attract the customers and financing necessary to achieve your vision.

According to business.gov.au, business planning helps owners and managers to prioritise and to gain control over the forces that influence the business. Business plans are also integral to securing financing.

A good business plan makes a value proposition and demonstrates, in measurable action-oriented steps, how you'll achieve it. The document should include sections that address operations, marketing, financing and staffing.

What does the research say?
Before you commit to the business plan, you'll want to fully evaluate the feasibility and profitability of your business idea. Solid market research focused on current conditions should be involved. Identify key competitors. Also, you'll want to think carefully about your own business acumen — your ability to be an entrepreneur and realise your vision. Are you ready to wear all the hats an entrepreneur must have on each day?

Before you get too far along, you'll need to research the best format for your new business. How will you structure it? How will it be financed? What are your goals and targets? The answers should guide the business. Marketing strategies should also be a consideration.

As part of this research and evaluation process, consider a SWOT analysis to break down possible strengths, weaknesses, opportunities and threats.

What should the document look like?
Business plans can exist in various formats. Some are for internal use, others for marketing purposes and still others are devised to secure financing. For each plan, think about who will see it and create accordingly. No matter the audience, create your plan as if someone outside the company might see it. Take time to proofread and format the document in a readable way.

What should a business plan look like on paper or your screen? It should have a title page, executive summary and be structured in sections with bolded headlines. Charts help, as does a table of contents and index with descriptions of industry-specific jargon.

The more engaging your business plan, the more your colleagues or investors will want to engage with it — and, by extension, your business.

How will the plan help me secure financing?
If you're going to ask anyone — from a friend to a bank officer — for a loan or investment, you want to be prepared with accurate information formatted in a useful way. Your business plan should indicate how much money you have, what your need is and what you anticipate earning. Take a three-year view, and plan to update yearly if not anytime conditions change substantially. Financial goals should be worded specifically; only list those you believe are achievable.

Insert supporting charts and documents. According to National Australia Bank, small businesses may include profit and loss statements alongside sales and cash-flow statements. More complex businesses should include balance-sheet forecasts.

Furthermore, including historical comparisons, and the market assumptions underlying future projections, will also be useful for prospective financiers.

How do I address unknowns?
While we can't always predict what will derail us, we know supply chains get interrupted, vendors go out of business and manufacturing shortages happen. So we can plan ahead for these potentialities. We can diversify our supply chains to limit the impact of a problem. As the global pandemic has shown us, the truly unexpected can happen.

By thinking ahead and considering ways to be agile, your organisation will be resilient and stay nimble. Your business plan should address how you will ensure diverse supply streams and what your plans are in case of a crisis. You can't predict what it'll be, but you can bet on uncertainty interrupting your business at some point.

What details should I address?
Even the edgiest startup needs structure. Your business plan should indicate if you are forming a trust, a company, a partnership or a sole tradership, for example. You'll need to register for an ABN and address any industry-specific regulations.

Likewise, your business plan must address human resources concerns such as the types of employment you'll offer, employee taxes and details of how you'll meet superannuation requirements. Will you provide training to your new hires? How will information be handled and stored? Insurance concerns should also be addressed.

If you're overwhelmed by planning or just want another perspective, WMC Accounting can help you. By leveraging our experience working with small businesses of all sorts, our team can ensure that your business plan is crafted in a way that positions you to take advantage of any and all opportunities for success. Contact us today.

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