A business plan is essential if you’re thinking of starting a business, but it’s also just as important for established businesses to provide clarity and direction, but how to write a business plan is a question I get asked a lot. Successful businesses are dynamic; they change and grow. You will often find that your original business plan needs to be revised as you grow and evolve with new goals and will find you will want to re write your plan.
A business plan is a document that summarizes the operational and financial objectives of a business.
Writing a business plan can help you determine if your business idea is viable.
People often make the mistake of thinking of a business plan as a single document that you just put together when you’re first starting out and then set aside, until its needed for future finance. But your business plan should evolve and change over time as the business develops, in the growth phase, an updated business plan is useful for forecasting or raising additional capital for expansion.
Every business needs a plan. Your business plan will keep you focused and if you are seeking investment it should provide a clear explanation of your business including a breakdown of all aspects from the people behind it, your marketing, operational activities and of course financial information. This will help illustrate clear direction, results and purpose of any investment you are seeking. So it is very important you know how to write a business plan.
A Business Plan is a written document that describes your core business objectives and how you plan to achieve them over a set period of time. It is designed to help you, and others, understand how you plan to generate money and make your business sustainable. A Business Plan often includes information about your goals, strategies, marketing and sales plans and financial forecasts. Read on below for more information about the key sections of a Business Plan. https://www.startuploans.co.uk/business-plan-template/
Your business plan is a roadmap for your business — but it’s not set in stone. Review it at least once a year and make changes if necessary.
It covers objectives, strategies, sales, marketing and financial forecasts.
It helps you to:
- clarify your business idea
- spot potential problems
- set out your goals
- measure your progress
You’ll need a business plan if you want to secure investment or a loan from a bank.
So it is important to Be concise, Be Specific, Be clear and Make sure your figures add up.
You also need to think do you have the right skill set, people and is there a market for your product/service
A business plan will help you turn an idea into a tangible business. It needs you to think through all the parts of your business to plan how everything will work. It will take a few weeks to write if you’re going to do it properly. Some parts will be easier to complete than others.
But how to write a business plan is easier than it seems at first, as there is a simple structure you can use to help you build your plan. The main sections are:
1.) Executive Summary
2.) Company & Background — this section illustrate the company milestones or actions and activities that have brought you to start or expand your business. Ensure you detail the management team and show strong experience or vision, the skills relevant to the service/products.
Structure & Ownership
3.) Products and Services — The key to writing a good product and services section is to be clear about the details of the product or service you sell, and what the USP (unique selling point) is.
4.) Market Analysis — The market analysis will reveal whether there is sufficient demand for your product or service in your target market. If the market is already saturated, your business model will need to be changed (or scrapped).
Demographics and Segmentation
Barriers to Entry
5.) Strategy — In this section you need to show clarity and the details for how you are going to launch your offering and what makes your business viable.
Plans to enter the market
Competitive Edge — what makes your offering different
Pricing — explain and justify your pricing strategy
6.) Marketing Plan — you need to show that you have identified the best channels to use to target your customers and communication.
Channels of communication
Message to customers
7.) Operations — in this section you need to include the details of how your company will operate.
Key Assets and Intellectual Property (IP)
Suppliers and terms of business
8.) Financial Plan — The financial plan is the determining factor as to whether your proposed business idea is likely to be a success.
If you are seeking investment, you will need to include details of the investment you are looking for, how you will use the investment and what returns you expect from this investment.
The financials are very important.
The cashflow is at the core of the document as it shows an estimation of the money you expect your business to bring in and payout over a period of time. It should reflect all of your likely revenue sources (like sales or other payments from customers) and compare these against your likely business expenses (like supplier payments, premises rental and tax payments).
A business plan is not necessarily something everyone will think they need to do, but it is something that I have personally always found extremely useful, especially if you are setting up a business for the first time. You have so much to think about, consider and decisions to make being able to put it all down in one place can be tremendously helpful. It can be as short and concise as you want, or long and detailed. It is your business and therefore your business plan. There is no wrong information the more you add to this document the more useful it will become.
As for myself and many new business owners, the first year or two can be challenging and being able to refer back to something to keep you on track and to focus on when you are having a bad day will help, as it will remind you WHY you wanted to set up your business and how you are going to achieve it and most importantly it’s lovely to look back and see where you began and how far you have come.
To conclude it’s important to remember that a business plan is a detailed road map that explains what the company’s goals are and how it will achieve them it is static it will evolve with your experience and knowledge and as you grow your business.
Author Heidi May (Business Coach) from Oasis Business Support