Business plans

This note is intended primarily for businesses that are seeking external finance. A business plan for use internally will tend to be more of a checklist of actions but a plan for a funder needs to explain the business in enough detail to reassure them that they will eventually get back their investment and make a return. A business plan can be prepared for the whole organisation or for a division or even just for a single product or service.

To prepare a convincing business plan, you need a clear idea of what your business is doing, where it is going, and how it is going to get there.

A business plan is a complete description of a business, or a division, or a service, and its plans for the next one to three years. It explains what the business does; it explains who will buy the service(s) and why; and it provides financial forecasts demonstrating overall viability, whilst indicating the finance available and setting out the financial requirements. In general, funders will prefer to hear about the whole business rather than a small part of it.

To prepare a convincing business plan, you need a clear idea of what your business is doing, where it is going, and how it is going to get there. Think about the resources needed – cash, equipment, premises, people – and how they will be deployed. For everyday purposes, the plan will cover a handful of key objectives and performance measures and could be written on a single sheet of paper and, perhaps, pinned on the wall to keep the objectives at the forefront of your thinking. And having a short business plan, with clear objectives, will help you stay in control.