Business Planning is one of the core building blocks of any business, even if the business has been going for 50 years! Business planning is not a one off process; it is an ongoing process of building and improving your business.
What is a Business Plan?
A business plan is a document that describes your business, its objectives, strategies, target market and financial forecasts. It’s a blueprint to your business’s future.
The process for creating your plan should involve God. God wants you to succeed. He is the creator, and therefore, has more business ideas than anyone you will ever meet. God wants you to fulfil your calling as an entrepreneur and as his representative in the marketplace!
What is the Biblical basis?
There are many sound reasons for doing a business plan, not least of which is that it is a biblical principle:
“Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to compete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, “This person began to build and wasn’t able to finish”
This is a very appropriate passage for entrepreneurs. The last thing you want is to be ridiculed for starting a new business and failed because you neglected to plan!
Not only will business planning help you to build a successful business, it will help you to determine whether a business is viable in the first place.
What is in a Business Plan?
A business plan needs to be thorough and comprehensive but not so big and convoluted that you never look at it. It should be a document which is referred to throughout the year (briefly each month to ensure you are focused). Below are the core elements of a comprehensive business plan:
Mission & Vision – Why your business exists and what it will look like in the future.
Goal Setting – Your financial, marketing, sales and kingdom goals for your business. These should be segmented based on category and timeframe.
Business Structure – The legal structure through which you operate your business, e.g. sole trader, partnership, company or trust.
Critical Success Factors – What are the vital, essential features which are necessary to ensure that this business is successful.
SWOT Analysis – What are the Strengths & Weaknesses of the business (internal) and what are the Opportunities & Threats to the business (external).
Market Research – Comprehensive research about and understanding of the Industry, your competitors & the Target Market.
Marketing Plan – Target Market, Market Segmentation, Value Proposition, Competitive Advantage, Distribution, Pricing, Promotion, Place, Products, Strategies & Process.
Operational – Information Technology, Administration.
Human Resources – Organisational Chart, Training & Development, Board of Advice.
Financial Management & Projections – Start up Costs, Ongoing Costs, Borrowings & Sales Projections.
But why is a Business Plan Useful?
A business plan is not just useful, it is essential.
- It allows you to evaluate your business from various angles. It helps you to enlist the support of investors, staff and sponsors.
- A plan helps you to articulate your goals and long-term vision. It also helps you to obtain loans from financial institutions and to determine the viability of your business.
- It helps you to identify your business’ strengths, weaknesses, its opportunities and the threats to its success.. It provides you with a means to create strategies which will ensure that it succeeds, including, for example, marketing and operational activities.
- It allows you to establish benchmarks to evaluate your success.
- How often should a business plan be created/reviewed? At least once every year.