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Good business plan underscores commercial success

A vital document for any business is a carefully written business plan outlining what your plans are and how you are going to achieve them.

A business plan serves as a blueprint to guide your business objectives, vision and strategy. The purpose of the business plan is to:

a. Help you focus on the core aims of your business by considering all possible options and anticipating any potential difficulties.

b. Assist with securing finance by convincing lenders and investors that you are in control of the project and that your business is worth investing in.

c. Serve as a guide which can turn your idea into a viable business.

d. Provide a benchmark for future business decisions and outcomes.

e. Give you a place to list specific goals and objectives for your business, helping you set out clearly how you plan to meet these goals and on what sort of timescale. It forces you to commit to that course of action

A well written business plan is a viable tool that can enable you to outperform your competition.

Key items

Executive Summary

This is best written last and should provide a concise overview of your business plan. Anyone reading this should be able to have a clear idea of what your business plans are.

Business Overview

This should include business description, vision, ownership structure and what the business has done in the past and what you intend to do going forward. Look at the industry you are in and include a brief overview of this, including what products or services you offer.

Goals & Objectives

State your goals and objectives clearly. Goals should be SMART i.e. Specific, measurable, attainable, realistic and timely.

Your business will have a number of objectives such as Financial, Strategic, Operational and Marketing etc. By making your objectives specific, you can measure progress towards them. For example, increase in sales this year by 10% and Gross Profit margin by 3% is lot better than just stating ‘increase turnover.’

Strategies

Consider the following when developing strategies: How do you plan to achieve your goals and objectives, your competitive advantage, go to marketing, pricing and operational strategies.

Situation Analysis

You should conduct a SWOT analysis (Strength, Weaknesses, Opportunities and Threats) that your business faces and go through each of these in detail. This will help you understand your business, your competitors and the current business environment.

An example of a SWOT analysis for a Golf club would be as follows:

Strengths

Weaknesses

Location and proximity to facilities

Financial position and bank overdraft

Scenery

No marketing plan

Big clubroom & good conference facilities

Lack of CRM system

Easy Walk with gentle sloping hills

Inconsistent levels of catering

Sand based greens

Lack of practice facilities

Internationally designed course

Signage

Strong junior membership and academy

Drainage issues

Opportunities

Threats

Potential closure of other golf courses

Severe weather

Better use of existing facilities e.g.

Loss of existing members

– Conference room for meetings

Other nearby courses especially their

– wedding venue

pricing policies

– Other functions i.e. birthday etc

Lack of resources to maintain/develop course

Become a community facility

Social membership esp. for locals

Management

Show how your business will be managed and staffed. Document the key personnel in your business and what are their job description and responsibilities.

Financial Plan

A business plan should include a comprehensive financial plan. A fully integrated forecasted Profit & Loss statement, Balance Sheet and Cashflow statement helps you determine what profits you are able to generate. Going through the process of preparing these budgets increases your understanding of the critical factors to making a business successful. You get to learn how items such as debtor collection days, stock turnover, and interest cover affect your business and how a small change in these can either improve or have a detrimental effect on the bottom line of your business. You should keep a list of all the assumptions made as you go along. Include this as an appendix as this will demonstrate that you have considered all the variables.

Succession Plan

Succession planning is one of the most important aspects a business owner should consider. This helps to show that you have thought of how the business will work in the future. Identify and put measures in place to develop key internal personnel. These staff should be groomed to fill in key business leadership positions in the firm.

Conclusion

A business plan is a working document and needs to be regularly revisited during the life of the business. Many make a mistake and limit the use for a specific purpose and then forget about the document.

DFK Oswin Griffiths Carlton have helped many clients prepare a business plan whether it was for the purchase of a business, arranging bank funding, business tool or immigration purposes. We have checklists available for our clients and then we meet with them to collate the information required. We also have accounting software to prepare a fully integrated forecast which forms a critical part of the business plan.

Anit Patel is an Associate Director in the Business Advisory division at DFK Oswin Griffiths Carlton Ltd based in Auckland. For further details, please contact him on (09) 379 3890.

Email: anit.patel@dfkogc.com

DFK Oswin Griffiths Carlton Ltd is a firm of chartered accountants providing the full range of business advisory and taxation services. Our experienced staff can advise you on all aspects of your business from both a domestic and international perspective.

DFK Oswin Griffiths Carlton Ltd is a sponsor of the ‘Best Businesswoman of the Year’ category of the Indian Newslink Business Awards 2014.

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