Writing a business plan can seem daunting at first. So before we get started on how to write a business plan, let’s explain what a business plan is and why it’s important.
A business plan is a written document that outlines your business goals, how those goals will be obtained and in what time frame. A business plan is an important document to have for your business when looking for help, advice, premises and finance. Your plan should cover at least the first 3 years in business, with a statement about how you see your business in the future.
Why do you need to write a business plan? Well, writing a business plan helps you think about what you are doing. You may need to explain your business to other people or organisations, such as a bank.
So, now that we have outlined what a business plan is, here’s how to write a business plan.
Start at the very beginning, your mission statement. Your mission statement is a formal summary of the aims and values of your business. What are your core values? What are the foundations of your business? Answering these questions will give you a good base for your business plan.
Think about how you will be better than your competitors and if you have a USP (Unique Selling Point). What are your business goals? Do you know how you would like your business to perform in 3-5 years time? Have a brainstorming session and get all these answers down on paper (or digitally!).
You will need to compile future forecasts for income and expenditure. Start with your income, what are you likely to charge for your product or service? Be conservative with your figures and research what your competitors charge.
Do you need to raise capital for your business? Do you need to buy equipment or vehicles, or look for premises? All this information is really important for potential investors.
Now that you have collected your initial data for your business plan, it’s time to go into a little bit more detail.
Outline your company goals and objectives and what your core values are. Highlight what your service or product is and who your target customers are. It’s also important to note why you think you’ll succeed with your current business plan. Why will you be better than your competitors? It’s also good to think about your team structure, will you need to hire an employee and when you think this could happen.
Describe what your product or service is in a bit more detail. What will you charge and what will be your markups? Explain your pricing module and how you came to the figure you have outlined in your forecast.
Marketing is a really important aspect of your business, so you need to explain your marketing strategy in your plan. Describe your perfect customer, who are they? Research who your ideal customer is and where you will find them. Outline the market you’re targeting and highlight demographics.
A good exercise to do for your plan is a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
Strengths – What do you do well? What do others see as your strengths?
Weaknesses – What could you improve on?
Opportunities – What opportunities are open to you? What trends could you take advantage of?
Threats – What threats could harm your business? What is your competition doing?
It’s a good idea to explain the state of your competition in your industry. Pick 3 of your competitors and think about what their strengths and weaknesses are.
Write them down and think about how you could improve your business model to stay ahead of the competition.
To start and run a business you’ll need to have a marketing plan in place. Why are potential buyers going to be interested in your product or service? Which marketing channels will you be focusing on and why? Will it be social media, your website and SEO (Search Engine Optimisation)? Think about what tools and technology you want to have in place to keep your marketing on track.
This brings us to your sales part of the business plan. How do you intend to reach and engage with new leads? What will you utilise to sell your products or services? Will you sell online or in-store? Or would you sell through a sales rep? All things to consider and work out what fits your products/services best.
Once you’ve honed in on the best way to sell your product/service you need to decide on the most suitable tools and technology to sell. Do you need a website with sales integrations or live chat? Do you need specific software to enable sales? Write down what the best course of action would be for your business.
Moving on to the more practical notes, what type of legal structure should your business be? The main types of business are sole trader, partnership and limited company. What are your legal considerations? List all government registrations, health and safety and insurance requirements you know you will need for your business.
What figures do you need in your business plan?
Start-up costs – Outline each of your start-up costs as a line item, followed by a total cost. It’s always good to keep track of your startup costs and a budget in mind.
Sales forecast – Provide your sales forecast for the next few years. You may want to summarize the forecasts in the plan but have a more detailed spreadsheet at the ready if need be.
Break-even analysis – Share at which point in time and after how many pounds in sales are reached before you break even.
Projected Profit & Loss – explain your profit and loss projections for at least the first year.
Funding requirements – What funding will you need in the immediate future to make your business a success?
With all the information above on how to write a business plan, it’s time to make your plan look professional and presentable. Put a cover on it and include a contents page, with page and section numbering if needed.
Start with an executive summary. This summarises the key points, starting with the purpose of your business plan. Use charts and graphs if helpful and make it easy to read. Even if the plan is for internal use only, write it as if it were aimed at an outsider.
We have a free business plan template to help you with all the points raised in our blog. Get in touch with us today and we can send it over to you asap so you can get started straight away. Alternatively, if you need help with your business structure or accounts we can help! Call us today or book an appointment!