What is a business plan?
- Theme: Plan to start your business
A business plan is the vital component for any business, providing potential lenders and investors with a roadmap of how your business will operate and how you will go about achieving your goals. Here is a brief guide to what this might entail for prospective entrepreneurs.
Why should I have a business plan?
Business plans are a necessary part of any venture, and are primarily used to secure the interest of third parties. The amount of work that you put into your business plan will be key to securing this interest, as well as providing you with a structured, methodical approach to laying out your business model. For this reason, it’s crucial that you approach a business plan with energy and attention to detail.
What does a business plan contain?
A business plan comprises several documents which describe everything from your unique selling point, to the assets you’ll need and the skills you have to succeed. It’s important to take into account who will be looking at your business plan. If you already know who you are presenting it to, it’s worth asking them what they would like it to include before starting out. Every business is different and as a result there is no set format as to what your plan should contain, however as a guide you should aim to include the following:
This is the opening section of your business plan, describing in a nutshell what your business is and what it will do. As the first thing a potential investor will see, this section will need to be as impactful as possible.
Description and background of the business opportunity, products and services
An outline of the industry background, as well as the unique selling point of the product or service you’re offering. This section should also detail any trademarks, patents or design registration you hold.
Market, competitors and sales strategy
Why will customers buy from you over your competitors? Is there a gap in the market for what you have to offer, and if so why is that? Your marketing strategy and the details of your target market should also be included here.
The finer details of how your business will operate from day to day. This means your business premises, location, IT systems and how your goods or services will be supplied or manufactured.
Management Team and Personnel
The credentials of the people who will help you to run the business, including your own background and achievements. Add details here of any training or recruitment costs which you expect to encounter.
Perhaps the most crucial section of your business plan, stating a detailed projection of the funds you’ll require and how much revenue you expect each year once you’re up and running, including a sales forecast, cash flow statements and your expected profits and losses.
Preparing your business plan
A business plan will take time and effort to prepare. It should be presented in as professional a manner as possible, preferably as a bound booklet, with your company logo and a cover page. You should also involve as many second opinions as you can before showing it to a potential lender or investor, including your accountant and solicitor.
Every good business plan requires acknowledgement of the wider marketplace and the business competition. Any potential lender or investor will want to ensure you have a sound understanding of market conditions, any legal issues and how customers are likely to respond to your product or service once it is released. Let the Business & IP Centre help you formulate the best possible business strategy. Our workshop ‘How do I research a business idea?’ will open your eyes to the wealth of information available here at your fingertips, helping you turn your business idea into a reality. Visit our events page to view our upcoming events.