Starting your own business? Before anything else you need to write a business plan. Simply put, it’s a guide or more of a map, showing what your business is, what is does and where it’s going.
It may seem like a daunting task, but it needn’t be if you follow the following steps from Business Adviser Neil Debenham who has advised a range of start-ups from launch to profitable success within the UK. For a quick step-by-step process, here’s what to include in yours:
- Executive summary
This is pretty much like an introduction where you will describe the skeleton of your business. You may talk about what your business is and does and where you plan to take it within the next five years. This section only needs to be a concise page, as it’s a summary. So, don’t spend ages writing it! However, make sure you cover all the basic facts as some investors only ask for this page when deciding to work with a new business!
In summary, this very brief section should include:
- Mission statement – including your main goals
- General company information – such as when you founded it
- Products or services – information about what you actually sell
- Financial data – including any banks or lenders you have approached so far
2: Company introduction
This section is designed to let investors have a good sense of your business including the nature of your business, where it sits within the market and how your company fills a niche and fulfils a need. Basically, this section, may include a bit of legal information about the kind of business entity it is and an overview of leadership within it.
3: Market research
This bit needs to be in-depth, so a thorough explanation about your industry and any competitors you may be up against. This section is there to tell investors that you’re up for the challenge and that you thoroughly understand your clients and any competition you may have.
You might explain about some of the important events within the industry, any current trends and how it’s grown lately.
This is your chance to prove anyone who might invest in your company, that you know your customers, what they want, who they usually buy from, and whether you’re serving a niche market. Once you’ve talked about the target market and how you hope it will grow, it’s a good idea to include information on the projected growth of the market. You should mention potential obstacles such as changing technology.
4. Management structure
Here you should detail who is who in your business and what experiences each team member brings. Some professional charts would be good in this section to show organisation and ownership structures including who owns what percentage of different sectors.
It’s also a good place to talk about your owners and any boards of directors or partners as potential investors like to see that you have a competent team in place. You could talk about any plans to hire new staff.
5. Products and/or services
Here you’ll thoroughly describe details about your products and services including why they’ll serve a purpose. Discuss them as solutions, rather than just another product. If it’s only in the creation stages and you plan to bring it to the market, how you will do this, should be described here.
If you have intellectual property, this should be added to this section, including pending patents.
Neil Debenham says: “This is your time to shine as his part is all about the sales, how you’ll get those customers coming to you for your products or services. Have you got a marketing team to help position your products? Scream about that here!
“You’ll need to be clear how you’ll sell your services or products whether it be cold-calling or sales meetings.”
Promoting yourself is vital so you’ll need to talk about how you will do this, including whether you will implement a PR team to help with editorial in newspapers and magazines, or how you will promote yourself on social media.
It’s a good idea to keep records of all financial transactions including balance sheets, accounts statements and any debts paperwork, as this is one of, if the most, important factors in your business plan.
If you are starting up, you’ll need to show the current state of your finances and plot out where you see yourself in the coming months and years. You should include how you plan to finance yourself, whether through start-up loans, venture capital funds or grants. If you need funding just now, this should be explicit in your plan.
Neil Debenham concludes: “If you’ve thoroughly researched the industry, your competitors and finances, you have everything you need right there to write a detailed and good-looking business plan. “