Ingredients of Successful Business Plans

  1. Understand what a business plan is;
  2. Understand what you intend to use it for;
  3. Identify and implement the critical steps to achieving a successful business plan;
  4. Understand what needs to be included in the plan;
  5. Be aware of gaps or weaknesses in your plan.

A business plan sets out the method for running a specific activity over a specific future period.

Business plans are needed essentially for the four following reasons:

  1. A formal, explicit document of the planning process;
  2. A request for finances;
  3. A framework for approval;
  4. A tool for operational business management.

This may come as a surprise to my fellow business consultants, but producing a successful business plan is not as difficult as people often think, so long as they follow a logical sequence. Here is my considered view as to the critical steps.

  1. Understand what you are planning and why;
  2. Define the activities of your organisation;
  3. Outline the current position of the business;
  4. Review and discuss the external market conditions, undertake and understand a competitive analysis, and define your market positioning;
  5. Define your core objectives;
  6. Prepare and articulate the strategy to attain and meet the objectives;
  7. Identify and review risks and opportunities;
  8. Prepare a strategy to deal with risks and exploit opportunities;
  9. Refine the strategies into operational plans;
  10. Prepare financial forecasts including revenues, costs, cash-flow, capital expenditure and assumptions adopted;
  11. Finalise the plan;
  12. Get it approved;
  13. Use it;
  14. Review it regularly and update as appropriate.

What should be included in the business plan?

Without being too prescriptive, there are certain necessary elements which need to be included. Such elements are:

  • Preliminaries – such as contents, contacts and definitions;
  • An executive summary;
  • A description of the business;
  • A review of the market, the competition and market positioning;
  • The vision, mission and objectives;
  • The corporate strategy;
  • The plan for developing the products and services;
  • Financial projections;
  • An outline of the risks and opportunities;
  • A conclusion.

Any casual viewer of the BBC programme, Dragons Den will be aware of how easy it is for weaknesses or gaps to be identified. Depending upon the purpose of the plan, this may, or may not, prove to be critical. It is often easier to recognise such weaknesses and gaps, and be prepared to deal with them, either by noting them in the plan itself, or having appropriate answers available should the need arise.

As a business consultant, this may sound like heresy, but I believe that any plan should be produced by the senior management of the organisation. That is not to say that the consultant does not have a role to play in its preparation. He does. Senior management should prepare the plan as they will then be able to present and discuss it, demonstrating to their audience that they fully understand their business and market. I believe that the consultant’s role is to help facilitate the preparation of the plan, the consultant can help undertake the necessary research, and can cast a critical and impartial eye over the plan.