A solid and carefully structured business plan is essential to
an organisation's success, and it is vital that owners and managers
recognise its importance in helping to achieve goals and to ensure
growth and prosperity. Nigel Lomax, owner and director of
Shrewsbury-based TaxAssist Accountants, offers his advice and
guidance on how to ensure an organisation's business plan is as
effective as possible...
"A business plan can be the key to an organisation and, while
many business owners develop one in order to obtain initial or
additional funding, it should also play a vital role across the
organisation and should set the course of a business over its
lifespan.
"A business plan should act as a strategy document covering all
divisions and areas of the business, and should highlight exactly
what the business is, what its short and long-term objectives are,
the specific market and environment in which it is operating, and
what its financial forecasts are over certain periods of
time.
"It is important to develop a long-term plan for the business so
that you have clear set objectives and a detailed strategy
highlighting your overall vision for the business. However,
it is also vital that this plan is reviewed on a regular basis so
that you can monitor whether or not you are achieving what you set
out to, and what potential steps you may need to take to change
direction. Constantly reviewing and changing your business plan
will also help ensure that your plan reflects any potential changes
in the marketplace, or within the organisation itself.
"A well-thought out business plan can help to focus both you and
your employees and inspire them to achieve the defined goals, as
well as help you to manage your business priorities and help to
identify any potential risks or opportunities. In developing
your business plan, you should ensure that you involve all key
people within the organisation in order to obtain valuable advice
across all areas of the business and ensure buy-in of key
objectives and targets.
"As well as helping to achieve staff commitment, your plan can
also help your business to grow through the acquisition of
additional finance. It therefore needs to showcase a number
of key things. It needs to highlight your current financial
situation in terms of monthly minimum income as well as profit and
cash-flow, and also needs to clearly show short and long-term cost
commitments, and any explanations as to how any anticipated market
share will be increased.
"Once you have developed your business plan, you will then need
to present it, whether it be to your bank manager, a potential
funder, or your workforce. To ensure you do this as
effectively as possible, make sure that you are fully prepared and
that you have all the information at hand should any questions
arise. Explain your track history - after all, it is you that
the potential lender is considering investing in. And
finally, be honest. It is much better to let a potential
funder know of any potential risks at the outset rather than
leaving them to find out at a later stage. Your business is
more likely to be successful if you have good relationships with
those who can influence your future.
"Despite the importance of an effective business plan, many
businesses fail to see it as a top priority which results in
disorganisation, conflict of opinion and, ultimately, failure.
Taking the time and effort to devise, develop and disseminate a
comprehensive and thorough plan is far more effective in the
long-run than working on an immediate basis. At TaxAssist
Accountants, we specialise in providing advice and guidance to
small businesses on all aspects of finance, tax and accounting and
can help you to create a business plan to suit your individual
need."