Writing a business plan can feel overwhelming, but it’s key to figuring out if your business idea will work. First, you need to be sure about your plan. If you don’t believe in it, others won’t either. Once you’re confident, you can use the plan to show investors and partners why they should join you. This easy-to-follow guide will help you start making a basic and effective business plan.
Your executive summary is a crucial part of your business plan. It should be concise, no more than a page, but powerful enough to engage and intrigue potential investors or readers.
In this section, aim to clarify the core of your business and your passion for it. Include key details like:
- Your business name and where it’s based.
- A brief and clear summary of what your business is about.
- Your founding date.
- What makes your business stand out in the market.
- Evidence that there’s demand for your product or service.
- An overview of your management team.
- The current development stage of your business.
- Your personal background and any relevant experience.
- How and why you came up with your business idea.
- The business’s operational location.
- Lease duration, if applicable.
- Your business’s mission statement.
Remember, this is just an overview; you’ll go into more detail in the rest of the plan. Once you’ve completed the entire business plan, revisit your executive summary. You might find new ways to better articulate your business concept.
Products and Services
This section is where you get to showcase the heart of your business – your product or service. Your goal here is to convince the reader that what you offer is superior and worth their investment.
Cover these essential points:
- Describe your product or service clearly.
- Explain why customers should choose your offering.
- Outline your sales strategy for the product or service.
- Detail how your products are produced.
- Mention any exclusive partnerships or deals you have.
- Describe your pricing strategy.
- Discuss any potential challenges and the benefits your product or service offers to customers.
- Specify whether you’ll sell online, in retail, or both.
- Highlight what sets your product or service apart from competitors.
In this section of your business plan, it’s crucial to clearly outline who is involved in running your business. You should demonstrate that you have a competent team capable of making your business successful and profitable.
Focus on these key elements:
- Identify the business owners.
- List the directors and shareholders.
- Describe who will manage daily operations.
- Highlight the experience of these individuals and how it benefits the business.
- Detail your management team’s structure and their experience.
- Specify who reports to whom.
- Mention any current vacancies and your plan for filling them.
- Explain your recruitment process.
Consider including resumes in the appendices to further support your team’s capabilities.
In the marketing section, it’s essential to show potential investors your plan for drawing customers to your business and how you stand out from the competition. Depending on your sales model, your strategies will differ. If you run a physical store, concentrate on local marketing tactics such as print ads, flyers, and broadcast media.
On the other hand, for an online business, focus more on search marketing and leveraging social media platforms. This distinction in approach is key to effectively reaching and engaging your target audience.
Break down your marketing strategy into four key components – the four P’s:
- Product: Define your target market. For instance, you might be targeting “22-34-year-olds in London, with an interest in photography and predominantly male.”
- Price: Detail your pricing strategy. Explain how you determined your price point and compare it with similar market offerings. Outline your marketing budget.
- Place: Describe your distribution channels. Are you selling retail, wholesale, or online? For e-commerce, show your strategy for driving website traffic. For retail, explain your plan for product placement in appropriate shops or areas.
- Promotion: Discuss your promotion tactics. How and where will you advertise? Evaluate the effectiveness of various methods like search marketing, social media, and traditional advertising to determine what will best serve to promote your business.
Your business plan’s operations section delves into the practical aspects of running your business. This part must clearly outline how your business will function daily, covering specific operational details such as:
Location: Specify your business location. Discuss any required renovations, parking availability, necessary licenses, and the potential for a hybrid workspace. How will this setup align with your business goals?
Facilities and Utilities: Ensure your location has essential services like internet, water, gas, and electricity. Identify your service providers for these utilities.
Inventory Management: Explain how you will store, manage, and track assets, stock, and equipment.
Trading Hours: Define your business hours. Are they fixed or flexible?
Payment Processing: Detail your payment methods. Will you accept credit cards like AmEx, contactless payments, or require invoicing for clients?
Staffing: Determine the number of employees required and outline their responsibilities.
Customer Experience: Describe the customer journey from start to finish, including your refund policy and complaint handling procedures.
By addressing these operational elements, you ensure a comprehensive understanding of the everyday workings of your business.
This part of your business plan is really important for showing investors they can make money from your business. If your business is new, guess your future earnings. Explain how you might grow your business, like getting a loan. Also, you can look at similar companies to guess your earnings. Remember to include:
Profit and Loss: This tells if your business is making or losing money. It’s your total sales minus costs and other expenses.
Cash Flow: This is about the money coming in and going out of your business. Make sure you have enough money coming in before spending. Too much spending without enough income means debt, and investors won’t like that.
Balance Sheets: Made every year, these show your business’s financial state. They list what you own (assets), what you owe (liabilities), and your investment in the business (equity).
Sales Forecast: This is your guess of how much you’ll sell. Break it down by month for the first year, then yearly for the next five years. Be realistic to keep your plan believable.
A good financial plan helps investors see that your business can make money and grow.
Glossary of Business Terms
Starting a business means learning lots of new words. To make writing your business plan easier, here’s a list of common business terms explained simply:
Asset: Something your business owns that’s worth money, like property or stock.
Balance Sheets: They show what your business owns and owes to figure out its net worth.
Business: An organization that sells goods or services.
Capital: Money or other assets a person or business can use to invest.
Cashflow: The money moving in and out of your business.
Director: Someone who runs a limited company, often owning part of it.
Employee: A person working for a business and getting paid.
Employer: A person or business that pays people to work.
Equity: The value of a company’s shares.
Financial Forecasts: Predicting a business’s future money situation.
Franchise: A right given by a company to sell its products or services, like a local ice-cream shop selling a famous brand.
Inventory: All the stuff a business has for sale.
Investor: A person putting money into a business hoping it’ll grow.
Liability: What a company owes, like loans or bills.
Limited Company: A business that’s its own legal thing, separate from the people who run it.
Net Worth: What a business is worth after taking away what it owes from what it owns.
Profit and Loss: A report showing how much a business earned and spent over a period.
Sales Forecast: Guessing future sales.
Shareholder: Someone who owns part of a business through shares.
Shares: Pieces of a company’s ownership.
Sole Trader: A business owned and run by one person, who gets all profits and covers all losses.
Startup: A new business.
Target Market: The specific group of people a product is aimed at, like toys for kids.
Umbrella Company: A business that handles pay for contractors who work through agencies.
Managing Your Accounting and Finances
Good financial management is key to running a successful business. It helps you keep track of your money, make smart choices, and plan for the future. Having a good accountant is important because they can help you understand your finances better, save on taxes, and give advice on how to grow your money.
Also, using modern accounting software is a smart move. It makes things like billing and tracking expenses easier and gives you up-to-date financial information. Some businesses find it easier to let a professional accounting firm handle their finances. This means experts take care of your money matters, and you can focus on other parts of your business.
Finally remember that managing your money well is crucial for your business to do well. If you need help or someone to manage your finances, don’t hesitate to contact Count. We’re here to help you keep your business’s finances on track.