How to Write a Business Plan
By Mary Cummings
Firstly, why write a business plan?
Imagine it's the school summer holidays. You've managed to get that last minute deal on a Cottage Holiday for yourself and the kids. You're all packed and ready to go. How are you going to get there? Will you simply hop in the car and hope you'll find your way there – eventually? Or will you carefully plan your route beforehand? Of course, you'd do the latter, wouldn't you?
Planning that route will take time, will it not? Which route will you take - will you take the Motorway or will you take the more scenic A-Route? Approximately how long will it take for you to get there? What time will you start your journey? Will you stop midway (you'll need to if you're travelling with kids) and are there any road-works which could hamper your journey?
And will the planning stop once you have reached your destination? Probably not! Those of us with kids know that to get the most out of your holiday, you may well plan (at least a few) activities for them.
Well, starting a new business is much like starting out on a long journey and writing your Business Plan is one of the first steps you take in planning for that journey.
How will you get there (how will you operate your business)?
Approximately how long will it take for you to get there (how long before you start to make a profit)?
What challenges might you encounter along the way (what factors might effect your sales)?
What will you do when you get there (your plans for growth and expansion)?
Studies show that businesses that have followed a Business Plan tend to be (no guarantees) more successful than those who have not. Why? Because they will have taken the time to thoroughly examine some of the above factors.
Writing a Business Plan also helps you to understand your finances better, as you will have forecasted your sales and costs. You'll understand what happens if you don't sell enough or indeed if you sell more than you anticipated. Even if your business is providing a service as opposed to a tangible product, having written a Business Plan will have armed you with sufficient information to help you determine how many customers you need to provide this service to and what happens if demand exceeds your ability to provide the service – e.g. have you factored in the cost of outsourcing or hiring additional help?
Ultimately, writing a Business Plan is a good discipline as it helps you to focus your efforts in the right areas - you'll prioritise what you should be focussing on in order to run a successful and potentially expanding business.
Finally, if you need finance for your business, your Lender will want to see a Business Plan with sound forecasted figures before they even consider funding you.
So – down to the nitty-gritty! How do you write a business plan?
How to write a business plan
The basic format of a Business Plan is as follows:-
· Executive Summary:
You complete this last of all, but it's the most important feature. Some Lenders will only read the Executive Summary and the Forecast, as essentially, this tells them what they need to know in order to make a decision on whether or not to invest in you. Your Executive Summary is a summary of your Business Plan, so it should summarise your vision, your target customers, your products or services, why you are better then your competitors and of course, your figures.
· Your business, its products and services:
What is your business, what will you sell, to whom will you sell? You need a clear idea of what you plan to do and how you plan to do it.
· Your marketing and sales strategy:
Do you have a clear idea who your customers are and what their needs are? Why will they buy from you? How are you going to attract them? What are your prices? You will need to research your market thoroughly, which means first understanding what your competitors do, finding their strengths and weaknesses and seeing how you can do it better (SWOT Analysis).
· Your operations:
Your facilities, IT systems, manufacturing or production facilities, etc.
· Your management/personnel as appropriate:
Your management's or your own credentials, skills, etc.
· Financial Forecasts:
Those all important forecasts and projections. It is absolutely imperative that your projections are realistic and plausible - but don't be put off if, like me, you are hopeless at maths. Many banks will provide basic assistance. For example, check out the HSBC website where you can download a simple Cash Flow Forecast for free. www.hsbc.co.uk/1/2/business/needs/starting-business/business-plan
Business Plan Templates
There are many Business Plan templates out there - some free, some modestly priced and some expensive 'all singing all dancing' Business Plan software packages that claim to do all the work for you. "Download a fully completed business plan for your industry online now … only £129.99!"
By all means use a template to help you with the format. Do, however, think carefully before spending money on buying a Business Plan software package. They certainly help you in correctly structuring the Business Plan (particularly with financial planning) but they can't do the work for you and as every business is different, there isn't a 'one-fit-all' package, even within your particular industry.
The Business Link website (see below) is an excellent resource for new and existing businesses. If you type "Business Plan" in the search box, you'll get a wealth of information on the subject, including where you can go for funding for your business, grants that might be available to you and even training.
Alternatively, Freelance UK (don't be put off by its Freelance title) is an excellent resource for Freelancers and new businesses. Again, type "Business Plan" in the search box – you'll get a very good write up on how to structure your Business Plan and you can download a Business Plan Template in Word for free.
Write your plan yourself or pay for a service/package?
If you have the resources, then paying someone to write your Business Plan for you is an option.
As mentioned above, Business Planning software packages can be purchased online. They contain the relevant template that you need to structure the Plan correctly and have sophisticated financing planning capabilities.
However, writing a Business Plan yourself is not a daunting task. You can produce a perfectly decent document with time, care and a little guidance armed with just a PC, a Word package to word process your document and a spreadsheet package to calculate your forecasts.
The best person to write your Business Plan (from scratch) is YOU. Firstly, only you truly understand your business idea. Secondly, during the course of writing up your Business Plan, you will learn a good deal more about your business idea, whether it is a viable product/service and whether there are any potential flaws.
By the time you have completed your Business Plan, you will undoubtedly have mastered valuable and practical skills that will service you well in operating your new business. How good are you at being "The Mystery Shopper"? It's a knack! How confident are you in pitching your product or service? Ah yes, but how confident are you at pitching it to a Jaded Old Sceptic? (Think Dragons Den). How good are you at researching, collating, understanding and using data?
And last, but by no means least, you will have developed a new found confidence in yourself. After all, you dreamt up a wonderful idea for a new business, you got it down on paper and now you can start to make it happen!
Why spoil the fun by delegating it to someone else?
© Article by Mary Cummings
Antecell Business Services
Mary Cummings has over 20 years' business and marketing experience gained in the financial and banking industry. Mary is London-based, married with two children and runs a successful agency, Antecell Business Services & Creative Marketing, which provides affordable, business and marketing support to self-employed professionals, start-ups, and SMEs.
Read more on writing business plans and other home based businesshelp, such as marketing your business, search engine optimisation and growing your business.