A business plan is not just a route to getting funding for your business idea. It’s an excellent way of testing how you’re going to run your business. So, what does it need to contain?
A business plan should be around 4 pages, covering the following:
1. Your idea (called the Executive Summary)
Summarise the product or service you’re bringing to market. Write this last, though, because it sums up the whole plan.
Cover the main selling points of your product or service.
Include key financial information and, if you’re asking for funding, why it’s worth someone investing in it. Put yourself in their shoes. People invest in things that will make money!
2. The Market
WHY – Why will people want your product/service over the others that already provide it?
WHO – Who will buy from you? Are you selling to new mums, or retiring couples, for example? What age range, background, financial status, etc. are your buyers?
WHERE – How big will you be in your market (not every company can be ‘the best’!). What area are you targeting? Is it a local region, the UK, Europe, or the world?!
3. Your competitors
Who are your competitors, what do they offer, and how much of the market do they have?
Your idea needs to have an edge, for people to buy from you instead of them.
How will the economy and technology have an impact?
Get research on market trends from local councils, the internet, tourist boards, libraries and industry institutes. Chat online for advice through LinkedIn groups and business forums.
4. Your current status
Analyse where you are now. Consider the following:
- What stage is your idea at?
- Is your product/service developed yet?
- Have you made any sales?
- What marketing have you done?
- Who will own the company?
Do what’s called a SWOT analysis: list your Strengths, Weaknesses, Opportunities, and Threats. What hurdles might you come up against?
It’s possible to start a business for under £50! It’s never been so cheap to do, with online marketing options like Facebook and Twitter. But first ask:
- What funds do you need to start your business?
- What moneys do you already have?
- What do you need in addition?
- Where can you get this?
Remember, when a business is growing it’s common to have cash-flow problems: receiving many orders is exciting! But you’ll need to obtain lots of materials or staff to service those orders, which will cost you. And you won’t make profit until you’ve delivered on those orders and invoiced for them.
Make financial projections. You’ll probably need funding to cover this period.
Once you’ve written your plan
Seek free advice from The British Library, banks, Exemplas.com and the East London Business School – which in spite of its name is not just for East London! Get a trusted friend to read it, too.
You can get funding through loans, asset finances, debt finances, or more hands-on organisations like credit unions or Haringey Business Development (HBV).
Once you’re up and running, refer back to your Business plan each month. Forward planning and keeping on track is key to where you’re going. Good luck!