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Business Plan: an Essential Tool for success

Irene Tse

A business plan is a document that clearly explains how you intend to run your business. If it’s clear on paper, it should be equally clear in your mind. It is important that you are able to identify and avoid the pitfalls. I would suggest the following do’s and don’ts for writing a business plan.

Do’s

  • Give an overview of the type of business you are operating, why you are writing a plan and what goals you are intending to achieve in your executive summary, in a clear and concise manner - make a good first impression to grab the reader.

  • Explain in detail the nature of your product or service and why people will support it? What sort of objectives will your business meet that other businesses can’t?

  • Introduce yourself and your team. Convince the reader you have the skills and experience to bring the plan to life. Remember that even the best plan is just a work of fiction until someone makes it happen.

  • Include the following sections in your final plan according to your specific needs: Executive summary, Situational (SWOT) Analysis, Business Strategy, Financial Forecast, Conclusion/Recommendations, and any supporting documents or references.

  • Test your plan by showing it to professional advisers, friends, other business people and anyone else who can critically appraise your idea. If they are left with questions, make sure you include the answers in your final plan. Use their valuable feedback to help you improve your plan before you see your bank manager.

  • Keep it confidential. Prevent others from stealing trade secrets that do not yet have any legal protection and have not yet gone to market. Ensure you only share your plan with those you trust.

Don’ts

  • Don’t forget the executive summary. As the introductory statement, this highlights key aspects of a business plan to entice readers to buy into the business idea. Without this quick overview, some readers may not be interested in investing any more time to decide if your plan deserves further review.

  • Don’t use jargon, acronyms or technical language. Avoid words and expressions that would be unfamiliar to a person without experience in a particular field. If the reader can’t understand what you’re saying, they can’t understand how you’ll run a successful business.

  • Don’t make unrealistic financial projections. Protect the credibility of your plan. Do the maths and make realistic forecasts based on the information provided in your plan.

  • Don’t assume you have no competition. If you think this is the case, you haven’t looked hard enough.

  • Don’t use graphics without substance - with the sophisticated computer software easily accessible nowadays, you could easily fall into the trap of over-emphasising aesthetics and can distract the reader from your key message.

Use graphics as a complement, rather than a substitute, for logic and reasoning. Most importantly, you should understand and believe in your plan because it is your business and not your bank.

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