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Business planning is essential to ensure business success, this generally starts with drafting a business plan. Having a properly formatted business plan can assist you in improving your business and attracting potential investors.
Business planning is assessing your business's current situation and setting up goals or a plan for the future of your business based on where you would like your business to go.
All business plans are generally different to one another; however, most business plans consist of the same basic components that we will discuss in this article.
If you have a business idea and are creating a business plan for this idea, then your business plan will look very different to an existing business plan. A new business’s business plan is heavily based on market research to attract customers whereas an existing business will use its historical figures as well as market research in its plan.
Below we have included the components of a practical business plan that we use at Coleman Financial Group.
It is a vital part of the planning process to provide a summary of your business's purpose in your business plan. The business purpose should relate to the business stakeholders and the impact you want to have on them. This is unique to each business and examples could include striving for customer satisfaction, offering competitive prices or offering a high-quality product.
We also ask businesses what their vision is for the business. This can include staff numbers, turnover, market share, locations etc. These are generally financial objectives.
This is a vital part of business planning. You should have clear goals in your business plan of what you want to achieve, this is generally more personal objectives such as profit, holidays, and working less.
These are your business's values that all stakeholders should strive to be in line with. Examples of business values are trust, striving for consistent improvement and inclusion.
It is important to have targets that can be quantified and tracked to ensure the business is progressing towards achieving the business goals outlined in your business plan. These targets can include metrics from a variety of sources such as employee satisfaction, risk control, internal processes and financial outcomes. Every business is unique so your KPIs will be different, but some general examples are sales, gross profit and customer satisfaction.
You want to be able to identify your target audience as this is who you want to purchase more of your product or service. You should use your current ideal customers to identify other potential customers, this is called your target market. You want to be as detailed and specific as possible to have a clear profile for this customer. Identifying your ideal client will help you execute your marketing strategy identified in your marketing plan if you have one.
Your value proposition is your unique selling proposition which differentiates you from your competitors. This is vital to know and understand as it is a key part of a marketing plan. Understanding the value your business offers will allow you to seem appealing in your marketing efforts to potential customers.
This is similar to a SWOT analysis that is included in a general business plan; however, these are more specific and easier to address.
You should highlight as many opportunities for your business as possible, although you may not act on all these opportunities it is good to have a living document of them in case you want to act on them later.
For your business plan's success, you should determine the vulnerabilities you need to be aware of and manage. This is based on vulnerabilities that can't be solved immediately due to the current situation of your business but should be minimised and observed.
Identifying your most critical challenge can assist in overcoming the challenge. Most businesses have numerous challenges that they are facing, but by identifying the most important challenge, it will make attempting to solve the challenge less overwhelming.
When setting business goals, you should make sure the goals follow the S.M.A.R.T principle (specific, measurable, attainable, relevant and time-based). This will help to ensure that the goals can be achieved and you can recognise when you have reached your goals. It is best practice to create your one-year goals first so that when you design your 90-day goals they are unified with the long-term goals.
We also recommend including a section to add actions to achieve the goals. These are just tasks that need to be completed to ensure the goal will be reached.
The information provided on this tax blog is intended for general informational purposes only and should not be considered as professional tax advice. While we strive to ensure the accuracy and currency of the content, tax laws and regulations are subject to change, and individual circumstances may vary. We recommend consulting a qualified tax professional or seeking advice from the Australian Taxation Office (ATO) for personalized guidance tailored to your specific situation. The authors and creators of this blog disclaim any liability for errors, omissions, or inaccuracies in the information provided. Use the information at your own discretion, and always exercise caution when making financial or tax-related decisions.
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