I am often asked the same two questions. Do I need a business plan? What should I include in my business plan? I am going to answer these questions when writing this article.
Do I require a business plan?
For most businesses the answer to this question would be yes. For the majority of new businesses and ones which require investment by way of a loan or a business partner, a business plan is a must. Any potential investor will want to see for example, your future growth projections before they commit to invest.
This is the type of business which does not require a business plan:
A business which is happy to stay as it is and which has no plans to expand.
A business which never has a need to take out a loan.
A business which is a one man band and is self-sufficient, without the need of any outside help.
This type of business is rare. Most businesses therefore will require a business plan.
It is one thing being aware of your need to formulate a business plan, the problem is most people have no idea of how to go about creating one.
The business plan will aim to show its readers all about your aims for your business and how you are going to reach these targets. You need to have a strategy firmly in place before even attempting to write the plan. You should know the direction you are going to take, the investments you are going to make in staff, equipment and machinery. You need to have business goals and an idea of when each target is likely to be met.
In most cases a business plan is used to try to attract people to invest into your idea and business. It is your sales copy in effect and therefore if you create a professional, well laid out and strong business plan, people are more likely to take you seriously and to invest.
On the other hand if it is rushed, poorly written and basically a weak business plan, you are unlikely to receive the backing you are looking for.
What should be included in my business plan?
People who read your business plan will not only want to know about the business itself, they will also want to know about you. Give them a brief summary of your history and what you have achieved in the past. Write down all of your ideas and really sell the positive side of your character to them. The fact that you are really hard working and that you thrive under pressure. You love a challenge and can not only work well as part of a team but also on your own.
Describe the market place that your business is a part of, the competition and also the opportunities for growth in that market.
Give them financial figures including running costs, projected earnings, projected growth forecasts and also any financial history the business might have had.
Show them that you are flexible in that you have a plan B if plan A does not come to fruition.
Sell them your ideas by telling them why you are setting up the business for example, and where you dream it will be in five years time.
Include a mission statement explaining what you are attempting to achieve with your business.
I hope this information has helped give you an idea of how to write a successful business plan. Good luck.
Free Tips On How To Write A Successful Business Plan
Tips You Need to Know to Write Your Business Plan
If you have been thinking about writing a business plan, you may feel overwhelmed with all the components and sections you have to write. The key is getting started. Your business plan will never be finished unless you take action. Here are eight tips you need to know to write your business plan.
1) Realize it takes time. Few businesses are overnight successes. Most require a considerable amount of planning and hard work before they take off. Writing a business plan requires thinking through how you will manage your day-to-day activities. Along the way, you may realize you haven’t thought much about how your business will operate, what makes your competitors successful, or how to best serve the needs of your target market. By working out these details, you can refine your strategies to focus on your highest-priority activities.
2) Create an outline first. Writing an executive summary or one-page overview of your plan will help you crystallize what components you need to include. Trying to tackle the entire plan in a few hours can be overwhelming. Instead, break the task into smaller, more manageable components. Think of your business plan as answering a series of questions. Start with one, then move on to the next.
3) Start with the section that’s easiest to write. What section can you finish quickly? Which aspect of your business are you most interested in or passionate about? Knock that out first.
4) Don’t worry about formal structure. A formal business plan has plenty of charts, tables, spreadsheets and pictures. Unless you will be presenting your plan to investors or banks to obtain funding, you don’t need these things. The purpose of writing a plan is in “planning” not creating the most perfect, aesthetically-pleasing work you can create. If your business plan is just a series of bullet points, that’s OK, as long as you know what it means.
5) Ignore your inner editor. As you write your first draft, you may want to go back and correct sentence structure, spelling, and punctuation. Don’t worry about these things initially. Get your thoughts down on paper. Then, revise it later.
6) Give yourself adequate time. Don’t underestimate the time and energy it takes to write a plan. Schedule 30 or 60 minutes of uninterrupted time at the start of each day to devote to writing. If you try to write your plan while exhausted or distracted, you may become frustrated or overwhelmed.
7) Make it personal. Your plan should reflect your enthusiasm and passion for starting this company. It’s your baby. Tell your story about why you want this company to be a success.
Take a break before revising. After you complete your first draft, put it away for a few days. When you come back to it, you will have a fresh perspective and can create a more cohesive document.
Keep in mind that your business plan is essentially a work of fiction. It’s a document that captures your vision for what your business will look like in the future. You aren’t a fortune teller, so no matter how much effort you spend writing the “perfect” plan, some aspects of it will be wrong. That’s OK. You don’t have to know everything now. As you acquire more real world data, you can revise your plan to better reflect your reality.
Top 10 Business Plan Tips
1. The most difficult part about writing a business plan is knowing where to start. If you have lots of thoughts floating around in your head, brain dump all of these onto a piece of paper. Once you’ve done this, it’s much easier to start organising your thoughts into categories i.e. finance, how the business will work, marketing etc.
2. Don’t be tempted to write all of your business plan at once. Work on a section for a little while and then after about 30 minutes, stop. Have a break for a little while and come back to it. Most of the really good business plans I’ve seen have been written in this way and the person writing it doesn’t get stressed by it either.
3. Have a think about whether you really need a business plan. If you need funding, you definitely need to write one. But if you don’t a two or three page summary of what you’re going to do with your business is much better than a 30 or 40 page document that you’ll never look at again. I don’t actually like the term “Business Plan”. I prefer to think of it as “planning the business” which is what you are doing. You’re saying “this is where I am now; this is where I want to get to and this is how I’m going to do it.” Much better that you think about these things rather than writing a book.
4. People mainly struggle with the market research and cash flow sections of a business plan, so leave these until last. The best way to approach a business plan is to do the easy sections first. Your business plan should have the following sections in there:
Section
Executive Summary: A summary of the business plan. Leave this until the plan is written.
A summary of the business: This bit has contact details of the business and your goals for the business (where do you see it in a year’s time?).
Management: This is where you write why you wanted to set up the business, what you hope to get out of it and why you’re the best person to run it.
The business: What is your business and how will it work?
Marketing and market research: Who are your customers, competitors and market trends?
How will you market and promote the business both on the internet and off the internet?
Financial & Funding: This is where you write your pricing strategy, any funds you’re needing and the purpose they’re needed and how you came up with your cashflow forecast.
Cashflow Forecast: The dreaded spreadsheet – more about this later.
Appendices: Anything else that doesn’t fit into the above sections
When you’re putting your plan together, start with the sections you find easiest i.e. description of the business and how it will work, the management of the business, pricing and marketing. Once you’ve done this, you’ve done over half and it’s not too bad to put the rest of it together.
5. The market research section is one of the hardest bits people have to complete. So, I would advise that you break this one down and complete it in the following order:
(a) Go to http://www.yell.com and the Internet. Look for other companies who are running the same type of business as you. Go to their websites, visit them or phone them up. What do you like about them? What don’t you like? How will you be different? What are their prices?
(b) Create a spreadsheet and list your competitors with the good bits and bad bits about them.
(c) Write a summary of your competitors and what you’ve found in your Business Plan.
(d) Now let’s look at your trends. Call into any bank on the high street and ask for a “Business Information Factsheet” about your business. Print this off and ask for a factsheet about your business. This will give you an overview of your industry and is a really good starting point. You can also research your industry by looking at your industry’s trade association – they usually have loads of different facts and figures that help you back your idea up.
(e) Finally, let’s look at your customers – write down:
i) Who they are.
ii) Where they are.
iii) What they like / dislike.
iv) Why they would buy your product or service.
v) How they will find out about you.
vi) When they will buy your product or service.
You may also want to produce a questionnaire and give this to your customers to find out their views.
For the market research section, you are trying to answer the question of “Is there a demand for your product or service?” by giving the reader facts, figures and trends to prove this. You will need to show you have been thorough as this is the area that most business plans fall down on.
6. The other area that people usually struggle with is the cashflow section. For this section it is worth you getting hold of a business plan template, which you can get for free at your local Business Link or bank. Have a look at the cashflow section.
Start with your costs – have a look at the list on the left hand side of the cashflow. Go through each item one by one and see if it applies to you. If it does, when will you have to pay for it? Let’s take an example of a phone. You will probably be making some phone calls in your business. Let’s say you will be spending £20 on this every month – plot £20 in the columns for month 1, 2, 3, 4 etc all the way to the end.
Let’s say the next item is premises and you will paying the rent of £90 every three months – plot £90 in months 1, 4, 7, and 10. Do the same for all the other items in your cashflow.
Once you’ve completed your costs, you now need to look at your sales. Work out how many customers you will have a month and on average how much they will pay. Will they pay immediately or will you send them an invoice and give them 30 days to pay? Remember your sales will vary according to the time of year so take this into account too.
Now you just need to add everything up and your cashflow will be complete.
7. I would definitely recommend that you go on a business start-up course to help you write your plan. Most Business Links (www.businesslink.gov.uk) will run one in your area and many of the local colleges do now too. They will be able to walk you through the process of writing a plan.
8. Don’t get hung up on making your plan so perfect that it never gets finished. If you think “Am I doing too much?” the chances are that you probably are doing too much, so you need to stop and evaluate what you’ve done and whether you’ve answered all of your questions.
9. You might want to think about using a professional to write your business plan for you. We’ve worked with many business owners to complete their plan and all of them have been successful as we know what lenders are looking for. We usually work with people who don’t have the time to complete it themselves, so if you’d like to work with us, please feel free to get in touch – helen.dowling@exceptionalthinking.co.uk or call 0845 644 9371.
10. Finally if you have written your business plan and would like us to review it for you for free, please feel free to send it over. We won’t send your plan out to anyone else and we are happy to sign a confidentiality agreement if you would like us to.
Does Your Business Plan Need a Makeover? Top Tips to Keep in Mind
Whether you’re a small, medium or large-scale entrepreneur, there is one crucial aspect of running a business that you cannot do without: your business plan. If you’re just starting out in establishing a company, the plan will serve as a guide that you can follow on what to do next. Once your company is already up and running, the business plan will tell you where your endeavour is headed. When you stumble upon a problem, it seems as if the plan can also magically come up with a solution.