Developing a 5 year business plan is actually quite a straightforward thing to do, but it can be a daunting process. When you sit down and look at your PC and then go blank, it can feel as if you are never going to get it written. So here are the top 10 tips for developing a 5 year plan:
1. Remember that you are developing a business plan, you are not setting anything down in tablets of stone. The business plan will change and evolve as time goes on. It will not remain the same and it will soon seem a little different, simply because you are outlining your goals, challenges and where you want to be in 5 years time. But the plan can be updated and can be made more fitting to different economic circumstances etc. So don’t panic about getting it exactly relevant to 5 years in the future. Instead concentrate on doing the best you can.
2. Some people can get caught up on the length of their business plan. They think that unless a business plan is say 25 pages long, that it is not of any worth. This is wrong; the business plan can be as long or as short as it has to be. Don’t pad out the plan with unnecessary words or items that really don’t need to be there. Keep it short and fairly punchy. It doesn’t need to be long and turgid.
3. Write the outline for your executive summary now. This needs to be fairly succinct and to enable readers to know what the business is, what you do, what the business aims to do and the objectives that you want to meet. You should include your mission statement in the executive summary but if you don’t have one, then simply write a mission statement, to include as the mission for your business.
4. The business plan may be a way of attracting funding, so you need to be able to showcase your senior personnel; sell them to potential investors. Tell potential investors about the senior management team. Why are they so good? Why do they deserve funding?
5. Give a good analysis of the market. For this you need to analyze the people who want to buy your goods or services, analyze your competition, then look at the buying behavior of target markets. Be thorough in this section and do not simply assume that you have created a market that is failsafe for your product. All markets are vulnerable, you simply need to show that you can survive and keep afloat when times get tough.
6. Marketing needs to be included. You will need to show that you can sell your product and that you have thought about marketing and understand the principles of marketing.
7. It is important to include some kind of analysis that looks at your strengths, weaknesses, opportunities, threats: namely a SWOT analysis. This should be honest and open but above all demonstrate that you have thought everything through and that you are methodical in your approach.
8. Consider the schedule and timings of your plan – don’t be overly optimistic (or too prudent either) set realistic and achievable milestones.
9. You are now coming to the fine detail of the business plan and you will need to ensure that you have included a very methodical 5-year plan projecting where you will be financially in 5 years time. Note that this has to be based on your past financial performance and needs to be accurate. All costs need to be included, such as rent, any payroll, insurances, operating costs and so on.
10. The final point is to simply include all relevant data such as bank statements, excel spreadsheets etc.
These points should be viewed as building blocks, enabling you to get to the end result in a way that is achievable and makes the whole process a whole lot less daunting. Breaking it down in to ‘do-able’ chunks is really the key to writing any business plan!