The new financial year it is a great time to put some thought into how your business is going. Gross profit margins are likely to be high, but overheads, in the form of costs of research, development, advertising, market education, and low economies of scale, are normally high, and can cause initial business development in this area to be loss-making until the product moves into the rising star category, which is by no means assured – many problem children products remain as such.
After you are satisfied with your business plan, you will want to present it to your primary audiences, whether they are external (for example, bankers and investors) or internal to your business (for example, Board members and the Chief Executive Officer).
The components of a business plan explain your objectives and the actions required to get your small business from where it is now, to where you want it to be. The process of creating your business plan will help you focus, crystallise your ideas and identify priorities, saving both time and effort.
A business plan technically contains and reflects the individual plans for the different functions within the whole operation, each of which may have its own detailed ‘business plans’, which might be called business plans, or more correctly departmental or functional plans according to their purpose, such as a marketing plan, sales plan, production plan, financial plan, etc.
Also, you will need to provide your financial institution with a full five year financial model that includes a profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, as well as important business metrics that focus on your business.