|
Now that you’ve got your business idea worked out and researched in detail, the next step is to turn this into a business plan. First of all, let’s define what a business plan is. Quite simply, it’s a written document that describes your company, setting out your vision for the business, i.e. where you are going, as well as your short-term objectives, or how you plan to get there. It’s about strategy and financial forecasts. Although it should be as detailed and accurate as possible, it is nevertheless a living document and therefore isn’t set in stone – needs and circumstances change and so will your business. Your plan will become a useful ongoing reference for you, and it should be reviewed and updated regularly to ensure it continues to meet the needs of the business. Your plan will guide you and keep you on track to ensure you don’t lose sight of what you’re trying to achieve. There are two key purposes for a business plan – to set out your case to potential investors and potential senior partners, and to provide a measurement tool against which you can measure the progress and success of your company. So in a sense your business plan also has to be a sales tool – it must be persuasive. You want to demonstrate your ability to manage a business and make it profitable – and therefore an exciting investment opportunity. Thorough research and accurate figures and forecasts are the essential evidence. You must make your case credible and compelling. However, beware of boring your audience with dry facts and statements. You want to catch the attention of your potential investors, so ensure that you interpret this raw information into a concrete, meaningful and inspiring vision for your business. The facts and figures won’t speak for themselves – it’s up to you to do a sales pitch for them. Don’t get carried away, though. While conveying your confidence and passion, it’s crucial that your business plan remains grounded, honest and realistic about what your company can achieve. There’s no point in misleading either your investors or yourself. This said, beware of going too far in the opposite direction, i.e. setting your sights too low. This is hardly likely to impress investors and from your own perspective it may mean you don’t achieve as much as you could. The key is balance: give an open and honest account of both strengths and weaknesses in each area. Where you highlight weaknesses, provide a positive and realistic plan for how you will address them. This will ensure that your plan comes across as credible and achievable. It’s your business and you’re the one with the passion and drive to grow it, so it’s important that you write the business plan yourself. By all means, though, enlist the help of associates to advise on areas such as finance and budgets and to review the plan for you. Do the plan yourself but get help from accountant or financial advisor if you want for the figures. Also, your local enterprise body (such as the business link or business gateway centres or local development agencies) may be able to provide you with useful tips and guidance. Here’s what a good business plan should include: Executive summary – this needs to be a short and snappy overview of your business and your plans for it. Everyone’s in a hurry these days and many investors will make decisions based on the content of this section alone. Although the summary should be positioned at the front of the document, you should write it last when you have a clear and complete idea of your business plan, to ensure that it captures everything. It also needs to be positive, confident and attention-catching without being full of inflated marketing hype. Information on the company – to put the plan into context, you should have a section describing your business. This should include areas such as: company history, company structure, industry/sector information, customer base, your products and/or services. Beware of making it a boring collection of facts and figures – put all the information into context by setting out a clear and inspiring vision for your company. Think more in terms of the benefits that your company provides to customers and what sets it apart from the rest rather than simply outlining its features (although do ensure that you describe clearly exactly what your company does). For example, rather than simply stating that your web design company builds websites, explain that you can help your clients to create a strong corporate branding and identity for their company and increase their company profile and web presence through carefully targeted Internet marketing. Your people – introduce the key members of your management team one by one, including any external advisors such as accountants. Explain each role clearly and outline their skills and experience and what they will contribute to your company. Also provide a description of how your workforce will be made up – the types of positions and departments. Explain what skills you intend to employ and how you will attract, recruit, develop, manage and retain them. Marketing and sales – provide a thorough analysis of the industry and your intended customer base as well as an examination of your competitors, their position and how you will deal with them. In terms of sales, outline how you will go about promoting and advertising your business. Operational details – it’s important to explain the key elements of how your business will operate. You should describe your premises (owned or rented, capacity, location), any facilities and equipment that you’ll require, your systems and the suppliers you intend to use. Financial analysis – figures can be very dry and boring, so provide a summary of the financial forecasts at the start to highlight the key points and put the figures into a meaningful context. All aspects of your business (as detailed in the above sections of your plan) involve costs and so your financial analysis should be comprehensive. Provide a detailed forecast for the forthcoming year as well as estimated long-term forecasts for up to five years, which of course won’t be quite as detailed. Include sales forecasts, cash flow projections, profit and loss estimates and all other costs associated with the running of the business. You’ll also need to explain your numbers – investors will scrutinise every single detail. They will want to know how you arrived at these figures and will be seeking reassurance that they are based on credible and accurate analysis. Of course, you’ll no doubt need to borrow money to get your business off the ground, so you should also provide a clear explanation of how much you will need to borrow and how you intend to raise the capital. You will be using your business plan to apply for loans or grants and attract investors. Goals and objectives – these should be clear and concise statements as to exactly what you will do to achieve what you’ve set out in your business plan, and how you will do it. It is also useful to include in this section a vision of future prospects for investors – an idea of what they might expect to gain from their investment in the long-term. This will provide an effective conclusion to your plan. This article is copyright protected and is not for republishing
|