The instability of the current economic climate is encouraging many people to review their future career options. While we came to terms with the demise of the ‘job for life’ concept a while ago, employees are now facing impending unemployment in an in-hospitable job seeker market. Subsequently, many more people are considering the possibility of forming their own company. But where to start?
The cynics among you will argue that perfection is unattainable. I would suggest that it depends on your definition of perfection; if business plan perfection can be defined as attaining the goals which the writer seeks, I would argue company formation and the perfect business plan are well within reach.
Every weekday in the UK, more than 1000 new companies are formed. Therefore, in theory, it must be easy to write a business plan: there are enough templates, books and online resources available to ensure that most people understand the basics of product, marketing, competition, operations, financials and strategy. However, I would suggest that this is misleading and that many new companies fail due to fundamental mistakes made at the business plan phase of the company formation process.
Obviously, different business plans will have different criteria for success/perfection. Therefore, while there is no ‘one size fits all’ step by step guide, I suggest that from that by following the simple headline tips below, you can build a plan that will provide the framework from which your business goals can be achieved:
• Highlight all the issues your business needs to address and identify if a real business opportunity exists.
• Keep it as short as possible whilst ensuring there is enough detail to build a full story.
• Use coherent forecasts and keep assumptions to a minimum. Where assumptions are necessary, use analogies with existing companies to consolidate the point you are trying to make.
• Communicate that management is key.
• Highlight the risks that are inherent in the business and explain, strategically, how you plan to address them.
• Crucially ask somebody independent to review your plan and suggest improvements and any amend.
So there we are, company formation made simple!