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A compelling and comprehensive business plan is an important asset for any business. It helps you to understand where you are now and where you want to be - then sets out how you intend to get there. If you need funding for your business, a detailed business plan can help give lenders or investors the confidence to invest.
The process of writing a business plan forces you to explore your business idea in detail and identify what you need to do to make it happen. It will quickly show up any flaws or potential stumbling blocks, allowing you to make your mistakes on paper rather than in your actual business.
A well-thought-out business plan will:
Business planning isn't just for when you're setting up – you should keep reviewing and updating your plan regularly. A plan is always a useful asset for persuading others to invest time, money and effort in your business, and keep your plans on track.
There are some key elements of a business plan:
While this comes first, you should write it last. It’s a concise summary of all the key information in the full plan, and is your elevator pitch on paper.
What is the purpose of your business – what problem are you aiming to solve for customers? You need to outline what you want your business to achieve, apart from making a profit.
How do you want your business to be performing in a year, and five years? You need to define your measures of success, making sure they are SMART.
Objectives should meet each of these criteria:
Outline clearly what is required in a simple statement.
Include some type of metric that will enable you to monitor progress and know when the objective has been achieved.
The objective should be challenging, yet grounded in business reality.
The focus should be on achieving the outcome, not the means of doing so.
There should be a target date by which the objective must be achieved.
Your strategy outlines how you intend to achieve your objectives. It details both the environment you’re operating in, and how you operate in it.
It’s vital that you understand who your potential customers are, and what they want. Alongside that, you should research who your competitors are - not just businesses that do the same as you, but those that meet your customers needs in a different way too (indirect competitors). Our Understanding your market guide has more information.
You also need to be aware of the external opportunities and threats for your business. Economic conditions, changes in legislation and new technologies can all have an impact on your business. You should identify any which are relevant to your business and outline how you will respond to them.
Lloyds Bank business customers have access to Business KnowledgeBox as part of Internet Banking, which contains guides to setting up and running over 500 types of business and includes key market trends and issues, and trading and compliance considerations.
Our customers also have access to the Lloyds Bank International Trade Portal which provides a gateway to explore international trade opportunities and detailed market information.
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