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Faced with a blank piece of paper the prospect of writing a business plan can seem pretty daunting - particularly if you’ve never written one before. But a solid plan is crucial to the development of your business. So, let’s start with the simplest but most important question of all:
What is a business plan?
A business plan is essentially a roadmap, setting out your goals and expectations for your business and mapping out how you’re going to achieve them.
How to start a business plan
It may seem daunting, but it really needn’t be. Start by jotting down your elevator pitch - the short and sharp summary of who you are, why you exist and what you’re aiming to achieve. If you can’t explain what you’re setting out to do concisely, it’s probably worth taking a step back and getting this right before attempting to map out a detailed plan.
Don’t beat yourself up if it takes a little time - sometimes the simplest things are the most difficult, but once you’re able to explain your idea succinctly, your plan should flow easily.
What’s the point of a business plan?
There are lots of reasons for writing a business plan - perhaps you’re looking for investment, or just trying to organise your thoughts. Whatever the case, a business plan should help you to set out your ideas in an organised manner, with rough timescales and key milestones. It should also help you to identify parts of your vision which may need more consideration.
What does a business plan include?
A business plan shouldn’t be complex and not all business plans look the same. However, it should always be organised into clearly defined sections that flow logically. Below, we’ve listed the most common sections included in a business plan.
Writing an executive summary
You’ll want to have this at the beginning of your plan for one simple reason: its purpose is to provide a concise overview of your plan. It’s a helpful summary for those who are short of time and just want a quick overview of the plan. It’s also helpful to have as a refresher and point of reference for your own use!
Despite it being placed at the beginning of your plan, it’s not uncommon to write this after creating the rest of your plan.
Your executive summary should include the key points laid out in every other section of your business plan.
- Problem: What problem are you solving for your customers?
- Solution: How is your business solving this problem? Remember to keep it brief at this stage.
- Your market: Briefly outline the customer segment/s that your product or service is aimed at, including the most compelling facts and figures you have available.
- Competition: What does the competitor landscape look like? Which brands are your main threat in the market?
- Founders and team: Who is behind the business and why are you the best team to make a success of it?
- The figures: Have you sold any products/services so far? What are your targets for the future one/two/five years? You may want to include a chart here to illustrate the most important information.
- Looking for investors? If the purpose of your plan is to source funding, then you should also use your executive summary to explain how much funding you’re requesting and how much equity you’re looking to exchange.
The opportunity is the starting point for many business plans. It follows on naturally from your elevator pitch, exploring the foundations of your plan in more detail.
It can help to split out this section into the following sections:
The ‘why’? What challenge is your business going to solve?
The ‘how’? How does your business solve this challenge?
Your target market
- The ‘who’ and ‘where’?
- Who will your customers be?
- Who does the challenge in question impact?
- How large is the market and where is it located?
- Is there potential to expand to wider markets?
Your competitor analysis
- What businesses exist that are already trying to solve this challenge?
- Is there space for your business too? If so, why and how?
Once you’ve established the why, how, who and where (in your opportunity section), it’s time to nail down a concrete plan of how you’re going to deliver your plan.
At this point, it can be helpful to think of the different operations within your business in terms of teams. You may be the only person carrying out all the tasks at the moment, but this can make it a lot easier to think things through - and hopefully you’ll have dedicated team members at some point in the near future!
Many a good idea or product has failed solely due to lack of marketing. Marketing is integral to the success of so many businesses. It’s fundamentally about how you’re going to reach your target market and convert them as customers. You can create the best product in the world, but if you can’t tell anyone about it (and sell it), what’s the point? You don’t necessarily need to build out a detailed marketing strategy in your business plan, but it’s a good idea to give it attention sooner rather than later.
As with your marketing strategy, include a basic consideration of how you’re going to get your product or service to sale, but it’s a good idea to create a separate detailed sales strategy too. Sometimes it makes sense to combine both your marketing and sales strategies into a unified marketing and sales plan, as there’s likely be overlap between the two.
What exactly is your product or service? In this section, you’ll want to include all the details of your proposition, plus any future plans to develop or expand your offering.
What technology does your business require in order to operate? Innovation Enterprise has a great checklist to help you with this.
Where will your business operate from? Do you require any specialist equipment or tools?
This is an area which you really do need to get right - so if you’re not confident about doing this yourself, it can be worth getting expert assistance. If you’re writing a business plan for the specific purpose of seeking funding, it is absolutely key that you get this section spot on.
- If you’ve made assumptions to come to figures, be clear about this in your explanation. There’s no point in inflating things or making uninformed guesses when it comes to numbers - you’ll only come to regret it later.
- Where are you currently, in terms of funding?
- How do you plan to finance your business at each stage of development? You can always amend this later as things change, but it’s a good idea to plan out how you expect to fund each stage of your business growth.
It can help to break things down on a monthly basis:
- Where are you currently at in terms of expenditure?
- What are you overheads?
- What’s your projected revenue for the next 12 months?
- What’s your projected profit or loss?
The bottom line (excuse the pun) is: is your business idea financially viable?
- Is your business dependent on others?
- What’s the supply chain?
- Have you already found a trusted supplier or is this something you need to explore further before growing?
- What would the impact of a supply chain failure mean in terms of your business’s running?
Leadership and structure
- Present your current situation: who owns your company; how is it set up as a legal entity; and who is has funded it so far?
- Include profiles of all existing stakeholders: founders, advisors, mentors, investors - set everything out. Explain what each individual brings to the table.
- How do you envisage your business’s development in terms of leadership and structure?
Cover off all these sections in your business plan and you’re on the way up! But don’t forget to think about the risks you face. Growing a business is stressful, but there’s no reason to give yourself undue stress - just be sure to get the right cover. That’s what we’re here to support you with: monthly business insurance gives early-stage businesses the flexibility necessary to stay protected while only ever paying for what they need, when they need it. Business insurance that scales with you.
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