How To Write A Business Plan
These days, there is so much competition for jobs that there has never been a better time to start your own business.
When you’re seeking financial backing and sponsorship for your fledgling small business idea, a well-written and inspiring business plan is essential. An effective business plan clearly sets out your objectives for the future and the strategy you’re proposing implementing in order to achieve them. Your business plan is also there for you to refer to as you grow. Use it to keep you on track and to make sure that your end goals are still clear in your mind.
What information should your business plan contain?
Your business plan should set out the nature of your business; what goods or services you will be supplying, your pricing strategy and how your clients will make purchases or place orders.
It’s very important that you research your potential client base thoroughly. Set out in the business plan details of who your market will be; their ages, occupations, lifestyles, geographical area etc. Consider whether you will be in direct competition with another supplier of a similar product or service and how best you can advertise and market your business to ensure you secure a good slice of the market.
The name you choose for the business is also extremely important. What image do you want to put forward? Is the name you’ve chosen memorable and easy to spell? Make sure that it hasn’t already been taken by a competitor. Google your potential name; how many other hits does this produce? That’s vital information as you really want your business name to be on the front page and not duplicated a million times over.
Include details of your management team and key staff members. This is very important information for potential investors and financial backers as they will want to exactly who will be managing their investment.
Financial institutions like banks will require profit figure forecasts together with details of how much money you will need and how you intend to spend it.
Make it dynamic!
When writing your business plan, try to approach it with your favourite book in mind. Is the document exciting? Will it hold the attention of the reader and keep them turning the pages? If you want to succeed in attracting investors or sweet talking your bank into lending you start-up capital, you’ll need to hook them into your idea by making it stand out from the crowd.
Beware of making unrealistic promises and forecasts though; experienced investors will see right through this. Keep it realistic and credible whilst remaining cautiously optimistic and able to support your claims with hard facts and figures. It’s easy to get so close to your plan that you can’t ‘see the wood for the trees’ so ask a trusted colleague or friend to read through it and try to rip it to pieces. This sounds harsh but it’s better to find out early on if the plan has flaws than wait until you’re squirming in your bank manager’s office!
A standard business plan will include detailed and comprehensive financial forecasts for cash flow, profits, and maybe a balance sheet. It’s best to restrict your forecasts for the next three years with monthly breakdowns for the first year. Any further into the future and you’re really just placing a finger in the wind as you can’t be sure what state the economy and markets will be in any further into the future than this.
Once again, err on the side of caution with your forecasting. It’s best to be slightly pessimistic in your projections as this demonstrates that you’ve been realistic. Obviously, if the business is already established you’ll have a track record to use in your calculations whereas with a new business much of your forecasting will be based on assumption and estimation which is much trickier to get right.
Once you’re satisfied that the plan holds water and is as good as it can be, make sure your final presentation of the document is professional and of top quality. There are plenty of free pieces of software and templates on the net which you can download to produce your plan and if you’re not confident that you can make a good job of this yourself, investing in a professional company to do it for you will be worth the expense.
The finished document should contain between three and ten pages of text focussing on the most important areas, together with your financial figures. At the back of the document will be a series of appendices which will contain the finer detail, any illustrative graphs etc.
About Alison Page
Alison is a small business owner, freelance writer, author and dressage judge. She has degrees in Equine Science and Business Studies. Read her full story at http://www.theladywriter.co.uk