Welcome back to our series for first-time business owners; today, we’ll analyze the rest of the business plan. To get the most out of this post, it’s important that you read Part I, where we analyzed the Executive Summary, Business Strategy and Marketing Strategy portions of the plan. Now, we will analyze the Operational Plan and Financial Forecasts, as well as other segments you can include within your plan.
The operational plan, appropriately enough, describes several tangible operational facets of your business. You’ll want to describe your hours of operation, as well as seasonality if you don’t plan on being open year round. Your suppliers, the facilities you require, and managerial information including stock control, customer data tracking and accounts management should all be included in this section. In the modern age, information technology (IT) management must also be described; whether you are using in-house IT support or hiring a contractor is relevant.
Financial forecasts are the quantification of the details you’ve included within the rest of your business plan. These forecasts should include projections for the next 3 to 5 years, but the most essential, detailed and accurate information should be in your twelve-month forecast. One way of forecasting is by giving three projections based on the data: one optimistic, one realistic, and one pessimistic. This way, you and your potential investors and stakeholders will have a projection for any eventuality. Cash flow statements, including salaries, projected sales, and working capital should be included, as should a forecast of your expected profits. You’ll want to include all sources of revenue and income, as well as a plan to repay any borrowers, including security that you can offer them when they lend you money.
These elements, combined with the Executive Summary, Business Strategy and Marketing Strategy, form the core of your business plan. There are other elements that can be included with your plan, however, that will paint a more accurate picture for potential stakeholders. One excellent element to add is a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis: an accurate assessment of what pitfalls and problems can take you down, as well as your ability to deal with these problems and find opportunities. Performing such an analysis honestly will make you more credible in the eyes of potential lenders.
Social responsibility has become more important as we begin to better understand the connection businesses have with their social and global environment. Details about how your business strives to be environmentally-friendly, your contributions to your community, and how your policies lend to a healthy and vibrant workplace can sway investors to your side.
There are many other elements you might include within your business plan; research these subjects, and take advantage of those that fit your business’ structure and needs. Keep in mind that brevity is the soul of wit, so don’t add elements just to pad your plan; a lean business plan means a lean, mean business. Remember that when it comes to financing, it’s helpful to have an efficient Winnipeg accountant to review your revenue streams, projected profits, and potential losses. This will enable you to create an accurate plan attractive to stakeholders.