Business Plans are important as they force the owner/s to think about every aspect of the potential organization in specific terms. They are crucial when raising funding and a good method of providing a detailed explanation, as to how it is thought the business will operate, over a set time frame.
That stated Business Plans have little reliability without already having an appropriate amount of historical records on which they can be based. In most cases, Business Plans bear no resemblance to actual figures or activity on comparison. To improve the accuracy of such a plan, an owner should first test the business concept and establish the Business Model.
The first step is to test the business concept and whether or not there is a market for the idea. This may involve prototypes for products or trial runs for services. Research, start small, gather feedback from potential customers, make adjustments and repeat until you have established your customer base and your product or service fulfills their needs. The time spent at this stage will protect your brand and help create a successful Business Model.
The Business Model
This will be the core of the organization’s operations and should be built around the new understanding of the customer base. The image below shows the areas that require consideration when creating a Business Model.
The creation process helps a business think hard about each area and how they interrelate. The model will of course evolve over time but the model’s ability to provide clarity makes it essential when establishing and developing a business. It’s a necessary stage to complete before attempting to write a business plan because it gives a plan basis.
Have you established your Business Model?
Newbury + English Accountants are here to guide you!
It’s always a good idea to involve professional third parties when creating a Business Model or Plan of this nature. An external opinion gives and alternative perspective and our experienced consultants will help ensure you make informed decisions throughout the process.