Why have a business plan?
Having a written business plan is useful for any business, no matter how big or the nature of the work. It helps to have some direction, and can also be used to show potential investors or lenders your plans.
When should a business plan be written?
A business plan is often written right at the start of the business, just as you’re setting up.
Reviewing your business plan on a regular basis gives you a benchmark to assess if you’re still doing everything you set out to do. Plans change, so requiring flexibility is not unreasonable, but your written plan can help set the tone of your business. It’s also useful to have an up-to-date version if you decide to seek out new investment or borrowing.
What should go into a business plan?
Deciding what needs to be included in your business plan depends on who the plan is for, and the extent to which your business has progressed.
If you are writing a business plan to attract investment of some kind, it needs to;
- realistically suggest a potential for return which is exciting enough to interest them
- demonstrate an innate understanding of the market
- explain a detailed plan for success
In the early days you may not have the experience which shows how your development can underpin future plans. Showing how committed you are, coupled with a firm grasp of what can be realistically achieved goes a long way.
Include an executive summary in your business plan
Write a company profile
Your company profile explains how and why you got started, the nature of the business, your market, and the products or services which you offer. “I created business because I identified problem or gap in market, and I can solve it like this”, is a good place to start. An overview of the people, or key personnel, involved shows what knowledge is in the company which will help progression. Locations, logistics etc. is also well worth popping in.
Document your business
This is the part of the business plan where you list all of your expenses, cash flow projections, income sources, and the tools available to you to achieve all of this. It might also include a list of agreements already in place, such as suppliers, vendors, distributors and so on.
And they all lived happily ever after
This is the bit where you show each stage of growth, and how you plan to get there. For example, “we currently operate in the UK, and will build on this presence like this. When we reach that point, we plan to enter the market in China and Russia, and will do it like this.” It doesn’t matter if it’s a bit less global!
Explain what opportunities you have seen, how you will exploit them, and what will trigger each new stage of growth.
Identifying opportunities and saying how you plan to use them is one thing. Actually having a plan for marketing your product or service to an audience shows more robust planning, so investors or lenders are more likely to trust you.
It could include advertising, social media planning, events, or grass roots engagement, but set out what you can realistically achieve with the budget that you have, and the level of success you can expect to see from it.
If you are writing your business plan to secure investments or loans, this is the bit where you ask. Say why you need the money and what it will be used for. Propose timescales for them to release it to you if it’s in chunks over time, and suggest a repayment schedule for loans or what’s on offer for investors.