PLANNING FOR SUCCESS In association with AIB

Ann Murtagh, Business Strategist, AIB

Why develop a business plan asks Ann Murtagh and how does a good plan help benefit your business

Often a business plan is used as a tool for raising finance, however a well conceived business plan will benefit you in many other ways. It is designed to give you a framework to develop your business ideas. It will put in place a formal structure, helping you establish where you are, where you are going and how you intend to get there. It helps to focus the management team and guide the business towards achieving its goals.

Establish Viability

The first step is to establish the purpose and viability of your Business Plan. The business plan is a marketing tool to sell your idea not just to others, but also to yourself. It forces you to take an objective and critical look at your business. It makes it harder to overlook issues, which you may not have considered or may have avoided. The plan will tell you how much money you need and when you will need it. It helps to put resources to best use.

It is possible that your business concept is not as solid as you had initially believed, in which case the plan will save you from investing money prematurely. This need not be the end to your project, merely an opportunity to change your approach. As problems are brought to the surface, solutions may likewise become clear.

Obtain Finance

Financiers need solid reasons to believe in your concept. The plan enables you to clearly demonstrate the financial viability of the business, by detailing total funding required, projected cashflow, a profit and loss forecast and costing and pricing details of your product/service. This gives prospective financiers evidence that the financials have been properly looked into, and risks have been taken into account.

Document And Control

Objectives should be attainable, clear to the reader and where possible quantifiable. This will help keep your focus and will provide the road map you need to run your business. Your plan will be an excellent yardstick for measuring progress against targets. It also makes the changing of goals and detours from your original plan a much more controllable process.

Motivate And Recruit

A good method for maintaining enthusiasm is to create a plan that sets down clearly your objectives. This will instill a feeling of both internal and external confidence. Clear goals allow you to focus yourself and your employees. A good plan may also be used for attracting key employees. It gives you a good opportunity to impress on others your aspirations, and if done well, to convey your professionalism.

Get Professional Advice

As with any project or venture of this level, professional advice should always be sought before acting on any accounting or legal matters.