I’m not sure about you, but with my renewed lease of life and a fresh new year, I’m filled with renewed optimism and hope that the perpetual credit crisis will begin to alleviate. Moreover, that some of the financial strain on micro businesses might be lifted.
Ultimately, it’s hard to know what the year might entail on the financial front. When listening to any economist predictions it’s worthwhile bearing in mind the age old adage ‘Put 10 different economists in a room and you’ll get 11 different opinions’. However, saying that, there appears to be a growing consensus that 2013 may be the year that growth returns… albeit in minuscule amounts.
This growth can bring increased opportunity. Clients and consumers may begin to loosen their purse strings as could the banks, offering the chance for you to expand your micro business.
Integral to this expansion will be investment. Grabbing this isn’t easy though, especially given the economic volatility and the fact you’re going to need to have significant investor confidence to get your hands on any of their cash.
A solid, fool proof business plan will go a long way in achieving this confidence, potentially proving a vital asset in convincing banks and venture capitalists alike that you’re not going to fritter away their money and instead provide a return on their investment.
It’s a process that can be time-consuming, but one that could pay considerable dividends if done correctly. A brief glance at a Dragons Den episode illustrates that.
So, if you think 2013 is the year your micro business can reach new heights, here’s a brief overview of what your business plan will have to consist of…
Firstly, a description of the business
Amongst one of the many things your plan will need to do, is to provide a comprehensive overview of your business. You’ll need to outline its vision and its aims, alongside how it plans to achieve them.
When doing this, there’s a fine line between making your aims too apprehensive or too ambitious. A good way to counter this issue is by sourcing outside opinion, so try to do this if you can.
Elsewhere, the acronym SMART is something worth bearing in mind when you’re drawing up aims and objectives, the respective letters standing for specific, measurable, achievable, realistic and time-bound. All of these are qualities your goals will need to have.
An outline of the current market details and their significance
In the construction of a thorough business plan, you’ll need to collate quantitative and ideally, qualitative data. This will shape your market research, providing details on the size of the market you’re operating in, as well as providing an overview of the potential competitors.
Anything significant your market research shows should really be included, although you’ll want to put a positive slant on the negatives, outlining how you’ll confront them. That said, don’t get Alastair Campbell-esque and spin too much, as you’ll probably end up doing your business more damage than good. After all, investors are there to help you confront issues that market research throws up.
The operational details
The length and detail of this section will be heavily influenced by the nature of your micro business. If its production based you’ll have to outline how and where the product will be produced and the scale that you plan on producing. Should your business be more knowledge based, than this section will most likely be briefer.
As you’re chasing expansion and investment, information on the proposed number of new employees and the like will also need inclusion, so that potential investors can cast an eye over plans and scale back, or perhaps even scale up your ambitions.
Perhaps the most integral part of a business plan to the investor is all the financial data. The nuts and bolts of the plan as it were.
Again, the nature of your micro business will heavily influence how this section shapes up. If you’re more production based, information on things like a capital equipment and supply list will need to be provided. Universal to every business plan will be the accounting staples though, including things such as predicted or existing balance sheets, income statements and cash flow forecasts.
You may plan to approach investors without a business plan. If so, you’ll be following the logic of the unintentional comic Karl Pilkington. He once remarked ‘You get nothing done by planning’. Needless to say, he’s currently the star of a TV show called ‘An Idiot Abroad’.
I’d get planning if I were you.
What expansion / growth plans do you have for your micro business? Take some time today to sketch out your goals. This will provide invaluable background knowledge to start informing your business plan.