Business planning is the backbone of every successful business. Having a strong SME business plan is crucial whether your small or medium enterprise is trying to launch a new product.
Fabricating a business plan for your small or medium enterprise is the prime step that propels a business in the direction of success. As we said previously in our blog, a business plan is a guide. It’s a guide with power to keep your business on the right track during growth and when asking for funding from investors. A business plan is what keeps companies focused on their goals and what moves them through hurdles.
Surprisingly enough, small businesses are still having difficulties in business plan consistency. That is the case for larger markets too, given the fact that more than one-quarter of UK small businesses don’t have a business plan at all. And they’re missing out on a £25bn of revenue in the process.
It doesn’t have to be like that for the small business and enterprise industry. And we’re here to help. Every small business and medium enterprise not just in the UK, but in every other market too, can develop a strong SME business plan by the following principles:
1. Make the business plan easy to read
This one is a general rule of thumb, but it works perfectly for a solid business plan. A business plan must be well designed and easy to comprehend as well. This is the case for the introductory statement as one of the key parts of the business plan, typically in one or two pages. It doesn’t matter if investors are with two decades of industry experience. Your business plan must be written in a straightforward language so everyone can understand what you want to achieve with your business idea.
2. Present Market Analysis in your business plan
Let’s face it, you probably are not the only one that wants to offer a product in the market. Not just investors, but your potential customers as well want to know what’s in your business plan and how the market will react to your products or services. Even as a small business, you must present a research for your target market. By showcasing how you understand your market and what makes your product a market fit, your potential customers will notice the benefits of using your product or service. Because you know, everyone wants to know what’s in it for them. That includes your customers too.
3. A business plan must have a distribution plan too
You have to be exact on how your business can sell and distribute its product or service. The methods that you’re planning to use have to be comprehensibly described in your business plan. You also must describe the number of costs that you need to deliver your product or service in your target customer’s arms. This includes from logistics to warehousing and delivering process arrangement.
4. You need to have a unique competitive advantage
This is the part of a business plan where you shouldn’t be modest if you’ve found your advantage in the market. What gives you that competitive edge? You can position yourself by presenting some distinctive traits.
You may have a unique patent, trade secret, copyright, strategic alliance or a brand new technology that you want to showcase to the world. Competitive advantage is one of the main ingredients of a strong SME business plan. Of a strong business plan in general, really.
5. For a strong SME business plan, highlight your team strengths
If your SME includes a management team or other skilled workers that are highly qualified, you need to showcase them too. This will give you a massive advantage when pitching your small business idea to investors and will further cement the trust that your potential clients have for your business.
Everyone wants to work with experienced experts in their field or have industry experience in general. That’s why it is important to point out what keeps your team in place, and what qualities does your management team own.
6. Provide realistic expectations for your small business
It’s easy to dream of business success. Everyone can do it. But it’s not easy to estimate the necessary stages and timeframe that can map out your business growth.
We should always aim to see and paint the real picture of our businesses if we want a strong SME business plan. When we get realistic, then we can articulate some plausible assumptions. But again, we have to back up those assumptions with some insights to prove that we did a good market research in the first place. Every stage of your business plan must be within reach.
7. Have more versions of your business plan ready
Small businesses and enterprises should develop more versions of their business plans. Because you’ll have different evaluations of your business plan.
For example, you need to construct your business plan in a different manner when you approach the bank for a loan. Bankers want to know what your business stability is, how you secure your business and cash flow. But venture capitalists expect and want to see high returns.
Everyone that wants to invest in your small business or enterprise wants to know your exit strategy too. These people want to know how you are planning to use their funding. You must show that you’re capable of securing their funds and covering their interest in the process.
We certainly hope that the principles described above will help you with a strong SME business plan for your small business or enterprise. We care about small businesses and enterprises and we don’t want to see potential success out of place and focus whether you’re in the UK, USA, and Asia or in other markets. Make sure that you stick to the principles above to makes sure that your business goes in the right direction.
Still don’t have a business plan for your SME? Don’t enter your market without following these 6 steps first.
Having a business plan is important because it will help you set realistic goals for your startup. It will serve as an excellent tool to secure investor funding and to establish the financial forecasts for your business and ROI (Return on Investment). To be a strong candidate for receiving investment funds, you must prove that you thoroughly understand every aspect of your business. And to prove that you know how to create a profit from it.
As a first-time entrepreneur that has a great new idea, we advise you to not jump into business waters without a plan. There are important questions that need to answer first before you even start the company. The BizzBee team of experts is here for you to help you answer all those questions and guide you through the process of successful business planning.