The following is a guest blog written by Emily Wilson:
Writing a well-thought out business plan is an essential step for any startup. It’s a crucial strategic document that will help you to transform your business idea into practice – and an opportunity to think about every aspect of your business. It’s a way to articulate your vision and demonstrate your credentials to investors, shareholders, suppliers and staff members. It’s also a document that you, the business owner, can continually refer back to, to ensure you’re staying on course, whilst also adapting it to meet your changing circumstances.
Academic research shows having a business plan can double your chances of success. However, many start-ups and established businesses neglect this undertaking, instead heading straight into operations without a plan to guide them. “Perhaps they’re scared by shows like the Apprentice, where the business plan is this huge weighty document, ripped apart by Lord Sugar and his interview team,” says Darren Nicholls, Product Manager of business advice website, Informi.
Sure, a business plan is important but don’t worry too much about what it looks like, it’s what it means to you. “If you’re passionate about your business venture, a lot of the content should come naturally,” adds Darren. “The dreaded numbers bit should flow a lot easier once you’ve spent a bit of time formulating your idea, outlining your vision and demonstrating your tactics.”
The first section of your business plan should articulate what the business will actually do. A neat way to do this is to present your ‘elevator pitch’. This should be a concise and memorable overview of your business idea that is simple to understand and compelling. Your pitch should aim to answer these three fundamental questions:
- What problem do you solve?
- How are you different?
- Why are you the right persona to solve this problem?
Getting an answer to these questions written down and sharpened into a compelling elevator pitch will help you focus on the finer details of your business plan. (And, of course, comes in handy if you find yourself stuck in an elevator explaining what you do!)
Before you can go into the finer details of your business plan in the next section, it helps to strengthen your idea with supporting research. This can incorporate a whole host of considerations but should say to the reader that you understand the external landscape and the business you’re launching. To do this, you might include the following:
- Market research – what is the appetite for your product or service?
- Competitor research – who are you competitors and what are their strengths and weaknesses?
- Economic data – what do you need to consider in terms of the national and local economy?
- Trends – are there changing consumer habits that you can capitalise on?
Now it’s time to go into the finer details of how you’re going to execute your idea. The research you’ve presented in the last section should feed into the logistics and tactics behind your business idea.
This section should include information on:
- the products and services that you intend to offer
- your costs and profit margins
- your business operations – where you’ll be based, staff, launch dates etc.
These are probably the most important details you’ll need to include in this section but you can go into more detail and cover things like marketing, suppliers and equipment if you wish. Remember, the more robust your business plan, the more useful it will be to you.
One of the last sections is to outline how the business will be set up and your financial requirements and projections. Unsurprisingly, this is a really important part of the business plan as it will significantly impact on the day-to-day running of your business.
- The proposed structure of your business. One of the biggest early decisions you’ll take is whether you set up as a sole trader, partnership or limited company. This decision will have various tax and accounting implications amongst other things. You’ll also want to factor in the equipment you’ll need, IT, and staffing roles (if any).
- The financial plans for your business. Probably the most detailed requirements of a business plan, this should include details of your initial startup costs, projected sales and cash flow forecasts.
Everything you’ve detailed so far should lead you nicely to the final section: the bit where you outline how you intend to fund your business. At this point, you’ll have a good idea how much money you’re going to need to launch and your operating costs, plus how much revenue you expect to generate. You’ll explain how you, the owner, intend to source your funds. For example, this might be through personal savings or a loan from family and friends. If you’re seeking funding from investors you’ll set out the possible sources of those funds, for example, grants, bank loans, or bringing in additional shareholders.
One section we’ve left out but you might want to include is a section outlining your experience and qualifications. This can be important if you’re using your business plan to seek investment, as it will reassure investors that you have the right attributes to make the business a success.
Before we leave you, here are some common sense tips that will increase your chances of writing a successful business plan.
- Don’t do it all in one go. Instead tackle it in chunks, one section at a time.
- Don’t assume. Provide context and assume the reader knows nothing about your venture or industry.
- Avoid jargon. Just because it’s a business document it doesn’t mean you can’t use everyday language.
- Get help. Don’t just keep it to yourself, gather feedback from friends and family – and get them to proofread it for typos!
- Be professional. It doesn’t have to be an elaborately designed document but it should be formatted in an engaging and accessible way. Maybe avoid Comic Sans!
When starting your business, there are many supporting organisations available that are in place to assist you throughout the start-up phase and beyond. Gaining support from these external organisations and charities will prove to be invaluable throughout your start-up phase as you will be able to utilise their expertise and services to help you create your business plan and assist with your organisations next steps.
When you ask your professional network for advice with your business, you’re actually expanding your network. You’re either interacting with new people or strengthening existing relationships. Furthermore, knowing that someone else is willing to take the time to help your business out can heighten your sense of purpose and give you the drive to keep pushing through.
If you live in the Liverpool City Region and are thinking about starting a business and need help putting together a business plan, contact us on firstname.lastname@example.org or 0151 706 8111 and discover what support is available to you.