What makes a good business plan?
If you talk to a military man, he will tell you that a plan is unlikely to survive the first hour of the battle.
I once served on a joint government / private sector committee that focussed on British business in the Middle East and North Africa. Part of my time was devoted to chairing a sub group on the Mahgreb (Morocco, Tunisia and Algeria). One day I was having lunch with my fellow sub-group chairmen when one of them, who worked for Unilever, observed that a plan was only any good if it could answer the question “What do I do today?” when he arrived in the office on a Monday morning.
The military man is not saying that one should not plan, merely that one should be ready to change the plan in the face of stark reality. Indeed the implication is that having planned, at least one has something to work with when having to make the changes, much better than running around like a headless chicken trying to decide what to do when faced with chaos.
For me a plan for a business has to define which market the business is working in. Who are the potential customers and how are they accessed? Does the market need to be divided into different parts, each of which has uniform characteristics? This is called segmentation. Does the organisation have a Unique Service Proposition (USP)? If not how does it differentiate itself from other competitors offering the same to potential customers; competitor research is also important.
What resources are available to the business? This covers finance (a huge subject in its own right), people (skills, numbers and availability need to be researched here), premises to work from, IT systems (including accounting systems, invoicing systems), purchasing arrangements (identifying potential suppliers and making the most cost effective arrangements for acquiring inputs for the business).
At some stage the business needs to identify its own strengths and weaknesses. On top of this the potential opportunities available to the business should be set out, while at the same time potential threats to the business need to be identified and plans made to neutralise them as far as possible.
So this is my “starter for ten” on what makes a good business plan.
Jolyon Larkman, Treasurer of the Board of Directors
Jolyon is a board member at Foundation East and chairs the Finance Committee. He is a retired banker (Standard Chartered Bank, Barclays Bank and Charity Bank) and sits on the boards of Suffolk Housing Society and the London Chamber of Commerce and Industry Commercial Education Trust; he also sits as a co-opted member of the Charity Bank's assets and liabilities committee.