Whether you are contemplating a new business idea or been running your business for years, business planning can help your business move forward — in leaps and bounds!
Analyse Your Business Idea and Yourself
Analysis can help you set goals for your business, and anticipate challenges you might face in the future and how to overcome them. Before writing your business plan, a good first step is to analyse your business idea. Questions to ask include:
- Is your business idea viable?
- Is there a market for your proposed service or product?
- Is your idea worth investing your time and money into?
You should then analyse yourself. Questions to ask include:
- Are you ready to venture into business?
- Do you have what it takes to be an entrepreneur?
- Do you have the skills needed to run your business successfully?
- Are you ready to put in the hard work?
- Will you be running a business or a hobby?
Determine Who Your Plan Is For
Next, consider whether your business plan has more than one purpose — will it only be used internally or will it involve external parties such as a bank or investor? This can help you decide what your purpose is and develop your plan for the right audience. If your plan is being developed for third parties, you need to determine what they will be most interested in. This is crucial, because you shouldn’t assume they are just interested in the financials — they will be looking at the whole package!
Do Your Research
Before you can undertake your plan, you will need to make some important decisions about your business. These include its structure, finances and marketing strategies. Research can help you develop targets and goals and better understand your customers and where your business should be heading. Any market research should also be accurate and up-to-date before you present it to investors or lenders as market conditions change over time.
Examine Your Finances
Investors and lenders will need to know your business is in a strong financial position and your finances are in order. They will want to know how much money you have, how much money you need and how much you expect to make in the near future. Therefore, undertaking an analysis of your finances is critical. And while extra funding can help you cover unexpected costs, you should be realistic and avoid asking for more money than you need!
Write Your Summary
When preparing to write your business plan, have a summary of the main points of your business with as few words as possible. Ideally, you should get to the point, but not overlook the important facts. This stage is also an opportunity to sell yourself, without overdoing it! Your summary should include details about your goals, market, business, current financial position, how much finance you’re seeking and what those funds will achieve.
How to Conduct a SWOT Analysis of your Business Case
One important element of how to write a business case is undertaking a SWOT analysis, which will help you achieve your goals. This is an analysis of its internal strengths (S), weaknesses (W), external opportunities (O) and threats (T). To get the most out of a SWOT analysis, you should have an objective or question in mind from the start. For example, are you using it to change your processes or help you decide if you should introduce a new product or service?
You should do some research to fully understand your industry, market and the business you in. You can also gain a range of perspectives by talking to your clients, staff and business partners. Market research can also help you find out more about your competitors.
Your Business’ Strengths (S)
Identify and list what you think your business’s strengths are. Some examples include those relating to your business’ competiveness, financial resources, employees, business location and cost advantages. At this stage, the list doesn’t have to be definitive – further along in the process you can start prioritising these.
Your Business’s Weaknesses (W)
Identify and list factors of your business that you consider to be weaknesses or that may put your business at a disadvantage to others. These can include staff absenteeism, distance to market, a declining market share, the absence of new clients or products, or a lack of intellectual property. This list can also indicate how your business has grown over time and if you review regularly, will give you insights into weaknesses that have been resolved. And although you may find new weakness, the absence of former ones is a sign of progress!
Your Business’ Potential Opportunities (O)
Potential opportunities are external and not necessarily definite. An opportunity for one aspect of your business can also be a threat to another. For example, introducing a new product can allow your business to keep up with consumer trends, but your competitors may already have a similar product — therefore, the same factor shouldn’t be listed as both an opportunity and a threat. Opportunities can include training programs, new technology, a diverse marketplace, partnerships or a change of government.
Your Business’ Potential Threats (T)
These are external factors that may be cause a problem or pose a threat to your business. Examples include increasing competition, higher interest rates, rising unemployment and the uncertainty of global markets.
You should now have four separate lists, so it’s time to prioritise! Questions to ask yourself include:
- How can I use my business’ strengths to take advantage of the opportunities I’ve identified?
- How can I use my business’ strengths to overcome the threats I’ve identified?
- What do I need to do to overcome the identified weaknesses so I can take advantage of the opportunities?
- How will I minimise my business’ weaknesses to overcome the identified threats?
Once you have finalised your lists, you can now starting using your SWOT analysis to develop strategies and ultimately work towards achieving your business goals!
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