2

F I a n n i n g f e r b u s i n e s s s u c c e s s
DISCLAIMER
The information in this guide has been prepared with care, but no warranty, express or implied, is given as to the
accuracy, correctness or completeness of the information, or for any advice given, or omissions from this guide.
Therefore, readers relying on the contents of this guide do so entirely at their own risk and they should seek their
own independent legal and fnancial advice. The information is provided to intended parties solely on the basis
that they will be responsible for making their own assessment and undertaking such investigations as they see ft
to verify all relevant information to enable them to come to their own conclusions.
P|aoo|og yo0r
b0s|oess s0ccess
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F I a n n i n g f e r b u s i n e s s s u c c e s s
0verv|ew
ln the guide titled The Keys to Business Success,
business planning, including its ongoing use as a
management tool, was listed as one of the keys.
This guide focuses on what a business plan is, the
benefts of planning and how to prepare a plan for
your business.
There is a well-known saying in business that
business owners do not plan to fail, they merely fail
to plan. This saying draws on the results of small
business studies which show that owners who plan
their businesses are much more likely to survive and
prosper.
Does this sound as though business planning is
the 'magic formula' for success? Not so; business
life is not that easy. While business planning is not
a guarantee of future success, it certainly helps
to understand, plan and evaluate key steps in the
decision-making process.
Readers are advised:
7|e o0|oose of t||s g0|de |s to o|ov|de gene|a|
|nt|od0cto|y |nfo|mat|on.
7|e g0|de does not o0|oo|t to conta|n a|| t|e
|nfo|mat|on t|at wo0|d oe |e|evant to any oa|t|c0|a|
o0s|ness oooo|t0n|ty.
7|e g0|de |s o|ov|ded to |nte|ested oe|sons on
t|e oas|s t|at t|ey w||| oe |esoons|o|e fo| ma||ng
t|e|| own assessment of t|at oooo|t0n|ty w|t| t|e
ass|stance of t|e |nfo|mat|on o|ov|ded.
A|| hg0|es conta|ned |n t|e g0|de s|o0|d oe
|ega|ded as est|mates on|y oased on gene|a|
samo|es and may oe s0o|ect to e||o|.
7|e |nfo|mat|on |n t|e g0|de s|o0|d not oe |e||ed
0oon |n s0ost|t0t|on fo| o|ofess|ona| adv|ce and
|nd|v|d0a| |nvest|gat|on.
Pe|sons |nte|ested |n o0|s0|ng any oa|t|c0|a|
o0s|ness oooo|t0n|ty a|e st|ong|y adv|sed to f0||y
|nfo|m t|emse|ves oy ta||ng o|ofess|ona| adv|ce as
to t|e extent of t|e|| ||g|ts and oo||gat|ons -
oa|t|c0|a||y |n |e|at|on to any o|ooosed |nvestment.
7|e g0|de |s o|ov|ded s0o|ect to t|e te|ms of t|e
fo|ma| d|sc|a|me|, w||c| aooea|s on oage 2.
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F I a n n i n g f e r b u s i n e s s s u c c e s s
what are the beoehts oI p|aoo|og?
While it has been acknowledged that business
planning does not guarantee success, studies
show that businesses which consistently undertake
planning perform better than those where planning is
lacking.
The planning process produces a number of benefts
for your business:
Forces an early consideration of essential goals
and basic policies
Helps to challenge old ideas and create a climate
for new initiatives
Gives you a clear focus
Enables problems to be recognised that call for
external sources of information and assistance
lncreases your objectivity. By converting
everything to numbers, planning prevents you
viewing the future in ways that the facts do not
support
lncreases your personal motivation and that of any
employees you may have
Enables growth to be planned and associated
capital requirements to be determined in advance
Provides feedback of information and periodic
reappraisal against established objectives and
performance standards
"As t|e |es0|t of o0s|ness o|ann|ng, a mao
of t|e way a|ead w||| oe d|awn 0o w||c|
w||| ma|e yo0 mo|e conhdent as we|| as
|e|o|ng to conv|nce |nvesto|s, |ende|s and
yo0| emo|oyees of t|e d||ect|on |n w||c| t|e
o0s|ness |s go|ng."
Craig Saward, Managing Director,
Circular Head Chronicle, Smithton
8arr|ers to b0s|oess p|aoo|og aod how
to break them dowo
Even though research points to a higher prospect of
survival for small businesses which plan and many
small business owners are aware of the advantages
of planning, a signifcant proportion still fail to
develop and use a business plan as a management
tool. Certain barriers tend to discourage them from
planning.
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F I a n n i n g f e r b u s i n e s s s u c c e s s
Barr|er Pract|ca| t|ps Act|ons I need to take
Lack of su|tab|e p|ace
to undertake p|ann|ng
Self-discipline and personal commitment again
are appropriate. Consideration may have to be
given to undertaking planning, say, on a Saturday,
away from day-to-day problems and operations.
D|fcu|ty |n start|ng Development of a personal commitment to
planning, self-discipline and a frm grasp of the
benefts that planning can provide will help to get
the show on the road.
Establishing a goal is the essential frst step in the
planning process.
Str0ct0re aod cooteot oI a
b0s|oess p|ao
Every business is unique. Your business plan needs
to be structured to suit the specifc requirements
of your business. There is no 'right' or 'wrong' way
to structure a business plan - each will differ in
presentation and emphasis. The particular situation
?
and requirements of your business need to be taken
into account, as well as the purpose for which the
plan is being prepared.
0heckpo|ot
The following checklist offers a handy reference of
the various elements that need to be included in your
business plan.
Key e|ement What to |nc|ude
T|t|e page Name of business
Address
Contact points for future reference (telephone, facsimile and emailj
Date of preparation
Tab|e of contents
Clear information about the contents of your plan
Number all pages
lncorporate a version control method so that the latest version of the plan can be
easily identifed
Execut|ve summary Purpose of plan
Brief highlights of the plan (overview of your businessj
Brief description of your business (product or servicej
Summary of marketing strategy
Summary of funding requirements:
- amount of funds required/equity offered
- how funds will be used
- how funds will be repaid
Key projected operating results
Precis of your management team
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F I a n n i n g f e r b u s i n e s s s u c c e s s
Key e|ement What to |nc|ude
Organ|sat|ona| p|an How your business will be organised
How it is expected to develop
Staffng needs
Operat|ng and
manufactur|ng p|an
How the day-to-day operations of the business will be carried out
Requirements for plant and equipment
Scheduling of work fow
Quality control
F|nanc|a| p|an Historical fnancial data, where applicable, for past three years
Business viability and timeline to proftability
Break-even analysis
Funding mix
Equity and borrowings
Debt reduction and repayment plan
Past trading results (if applicablej
Financial projections for next three years - balance sheet, proft and loss
statement and cash fows
Key fnancial ratios
Projected rate of return on investment
Assumptions underlying the projections
Imp|ementat|on
t|metab|e
Action plan of timelines for implementing the key elements of the plan
Append|ces Material to support the main body of the business plan e.g. brochures, summary
of market research results, resumes of key personnel, letters of reference etc