Here we explore how and why to write a business plan, whether this is to attract investment, or for your own strategic development. Even if you are not planning to approach investors for funding, you can write a business plan that will effectively keep you on course and achieving high targets. Whether you are starting out, or even if you have begun trading, these tips will help you write a business plan, whatever your industry.
Why Write a Business Plan
There are lots of reasons why you may be asked for a business plan, especially if you are seeking investors, but even if you are not, knowing how to write a business plan is a solid asset to your strategic development. This will help you to organise, gather information, and create a roadmap for your business activities. Firstly a business plan doesn’t have to be lengthy, it should be unique to you and the needs of your business. If your business plan is not intended to be a public facing document, there’s no need to feel intimidated by getting started. Think of it more as a work in progress. A place to record your aims and goals and flesh out how you will act on these as you progress. This is an excellent way to give your business direction and challenge yourself to attain high targets. If you are seeking investment, you will likely be given a set of parameters to fulfill. Fortunately when you write a business plan, you can take your time to collate your figures and try out different scenarios, rather than facing the heat of a dragons den panel.
Getting Started
Set out some section headings so you know what information you are going to need. There is no definitive guideline as to what you should cover, you may wish to expand or combine sections, or add details and information that is a custom representation of your business. Keep it simple at first as these are details about your business and strategic direction that will emerge and evolve over time, according to the activities of your business.
Executive Summary
The first section to appear in a professional business plan is the executive summary. Although it appears at the start of the business plan, it is easier to write the executive summary last. This is because this section sums up the whole plan. It provides an introduction and high-level overview of your business, including your mission statement and details about what products or services you provide. A good executive summary provides a capsule statement of your business, brand and organisational culture.
Business Description
In this section describe the business you’re developing, including what sort of problem your products / services solve and what type of customers you anticipate, in general. Describe the scale of your business. State the industry that your business serves, whether this is a specialist trade, or solves a universal problem or need, whether you serve a local client base, or whether your product or service can trade nationally or internationally. You can also expand this description by offering an overview of industry trends or expectations, key stakeholders or custom information about your business.
Market Analysis
A good market analysis section is crucial to a successful business plan, as it identifies your best customers or clients. If your business is likely to encounter strong competition or a highly populated market a thorough market analysis could make or break the success of your business. To write a compelling market analysis, thoroughly research the primary target market for your products / services, including geographic location, customer demographic, your target market’s needs, and how these needs are currently being met. A good market analysis should demonstrate that you have a thorough understanding of the people you are planning to sell your products / services to, so that you can make educated predictions about consumer behaviour. However the whole point of conducting a market analysis is to test your theories and expose any knowledge gaps. You can make the most of customer feedback to fulfil these knowledge gaps. There are many tools and strategies you can use to conduct a market analysis and then write up the results in your business plan.
Competitor Analysis
Technically this forms part of your market analysis, however it is so important that we should focus on this section in a little more detail. You may or may not be aware of your competitors and how you compare to their market share, because you don’t know what you don’t know, which is why a thorough market analysis is so crucial. In writing the competitive analysis section, you’ll measure how successful your direct and indirect competitors are in the marketplace. This section of your business plan includes an assessment of your competition’s strengths and weaknesses, any advantages they may have, and the unique qualities that make your business stand out from the competition. It also includes an analysis of how you will overcome any barriers to entry in your chosen market. A thorough competitor analysis will help you distinguish your business from the competition and potentially persuade investors to compete in the marketplace successfully. In this instance you want to present your venture in the most attractive and professional way possible. This section should give a positive perspective on your place within the industry. Set your business apart from the competition by describing your or your team’s expertise, as well as your competitive advantage.
Marketing Plan
The marketing section provides a detailed explanation of your sales strategy and the activities your business will undertake to make sales. This is informed by your price plan and your business’s unique selling proposition. You will need to explain here how you plan to get your products / services to market and your proposed promotional activities.
Unique Selling Proposition
Why should people buy from me over my competition? Refer to your market analysis to explore all the benefits of your product / services to the various demographic sections of your market. Try to think or every possible benefit to every section of your market and then use this to analyse your target market and think about how your promotional activities will reach these sections effectively.
Ownership and Management Plan
This section outlines your business’s legal structure. This could be whether you are a sole trader or a limited company and management resources, including the internal management team, your stakeholders and any external management resources. Include your human resources needs. Include any experience or special skills that each person in your management team brings to the business. You can include any advisory board or consultants as a management resource.
Operating Plan
The operating plan offers detailed information about how your business will be run. It provides your business’s physical location, descriptions of facilities and equipment, types of employees needed, inventory requirements, suppliers, and any other applicable operating details that relate to your unique business, such as a description of the manufacturing process, or specialty items needed in day-to-day operations.
Budget and Financial Forecast
It’s important to demonstrate that you have a solid sense of your current finances and funding needs, as well as projected income. Provide a description of your sources of funding, any funding requirements, your income streams and estimated income. When you write a business plan, you need to detail what your set up costs are along how you have obtained the capital for this, plus how you will pay back any loans or investments. Most importantly you need to include a cashflow forecast that realistically represents your needs financially and what you can expect in revenue.
Appendices and Exhibits
Include any additional information that will help establish the credibility of your business idea, or bolster your potential success at the end when you write a business plan. You may choose to include marketing studies, images of your product, permits, patents and other intellectual property rights, credit histories, résumés, marketing materials, and any contracts or other legal agreements that relate to your business.
At Prestige Business Management we can help your Business
Prestige Business Management are here to help and we pride ourselves on our communication and our straightforward guidance for start-ups and tailoring the most effective accounting for your business, for every stage of growth. Find out what we can do for you. Call us today on 0203 773 2927.
