4.1 What is a business plan
This section introduces what a business plan is – what needs to be included and how important it is to the early stages for establishing and starting your co-operative.
What is a business plan?
A business plan is your a roadmap for your business and everyone involved for the first few years. It will allow you to chart your progress and see whether you are on course.
Your co-op's business plan should be a meaningful document, not just a box ticking exercise.
Already got a business plan?
What is in a business plan?
It is the plan of how a business will be set-up and developed. It describes how and why it will work.
The core of your business plan will be your financial projections based on your marketing plan. The whole will be wrapped in a narrative that explains:
- Who you are and how you are organised
- What you're going to do
- Why you are doing it
- When you are going to do it
- Where you are going to do it; and
- How you are going to do it.
There is no right or wrong format. These questions are designed to help you cover the key areas – you may wish to edit or re-order them, but be careful not to omit anything.
If you can answer all the above truthfully and realistically, and inspire confidence, then it's a good business plan.
All of the previous activity on the start-up journey of your co-operative will have provided you with the building blocks of your business plan.
Why do you need a business plan?
You will need a business plan to show to other people – if you're applying for loans, or applying for support or grants. But there are so many more reasons why having a business plan is a good thing.
If approached in the right way, a business plan will:
- Provide a structure so you know what needs to be looked into.
- Provide the questions to drive your research.
- Help you get a 'big picture' view of what your start-up business wants to be and wants to achieve. This will be a big collective investment of time and energy – what do you think about it?
- Construct the business plan
- Read the business plan
- Do you believe it?
- Give you a blueprint to follow during the start-up process. Very few businesses can get into full production and sales immediately. The more that can be worked out up front, the faster things get up to speed and the more likely your business will be a success.
- Be a benchmark. A business plan will help you mark out milestones and targets that your performance can be measured by. Are sales meeting projection? Are the costs on target? What is going right and what is going wrong?
- To establish common purpose. To make sure that everybody involved knows:
- What the business is about
- What they are committing to.
- What responsibility(s) they have – e.g. workers, associates, key suppliers, marketing people, possibly key customers, family, friends, auditor, accountant, solicitor, landlord and investors.