Preparing a business plan: what you need to know
We have all heard the famous quote, “If you fail to plan, you are planning to fail” and this historical adage could not be truer when it comes to writing a business plan.
It would be fair to say that launching a business can be incredibly exciting, but you may be tempted to accelerate your business to get to the exciting parts because you are overflowing with ideas.
While boundless enthusiasm is great, effective, comprehensive, and detailed planning is probably THE most important stage in the process of establishing a new business, so it is critical that you do not overlook it.
A business plan is not something you jot down while you are getting started and then forget about. A good business plan is one that you will frequently refer back to, to ensure that you are meeting your objectives and making the most of your fantastic ideas.
It is also important to remember that every business should have a plan, not just start-ups or new businesses. A business plan is your bespoke, appropriately tailored document that sets out your goals and how you intend to achieve them.
There are no set rules, it does not have to be particularly long and cumbersome – some business owners may choose to produce a simple one-page document.
Writing a business plan
It is important when writing a business plan to be concise and specific – you will want anyone reading your business plan for the first time to understand what your business is about just by taking a quick glance at your plan.
You might be looking for potential investment or financial support from external sources so keep it simple, do not use jargon and make sure you tell the reader what they need to know.
Your business plan should begin with the executive summary. It is usually better to write it last, as it summarises the full plan.
Your summary is intended to grab the readers’ interest in your concept and should include just how you differ from the competition and how much money you anticipate making.
In this section you should provide more details on why your business is needed, what opportunities there are and explain why customers would buy what you are offering.
You should also give information about the approach you are taking to find a solution – how does it fulfil the requirements that you have specified and how your business is different?
As well as this, you can set out the legal structure of your company and who your stakeholders are.
Identifying your potential market should come next – where are you selling and to whom? Give details about how you will find your market and how many customers you are aiming for. Critically, how, and when that amount will increase.
Look at market trends and your competitors – how is the market evolving and is it expanding? Is there existing rivalry between the businesses that you will be competing with and how do you intend to entice clients away from your competition?
You may well have heard of a SWOT analysis before, but do you know what it stands for? SWOT is the abbreviation for Strengths, Weaknesses, Opportunities, and Threats.
You can delve further into your idea with this. Typically, a SWOT analysis is formatted as a grid on one page with four squares, one for each section. After that, you can write notes in each square.
Making SWOT charts for your rivals should also help you in gaining their business.
As you set out your strategy, you can describe how you are planning to operate your business in this section. It should include, but is not limited to details about:
- Sales and marketing – provide further information about your goods and services, your pricing policy, and your sales and marketing plan
- Operations – where are you based and how will you operate?
- And your team – do you plan to employ staff or is it just you alone?
If you are searching for investment, it is crucial that you detail the numbers here. As a minimum you should outline your profit and loss forecast, your balance sheet including your assets and liabilities and your cash flow statement – don’t forget that cash is king!
Quite simply, this can where you can include more detailed graphs, tables, and notes for your reader to refer back to.
Finally, and in summary, be aware of your audience – do they know the industry? Keep your plan succinct and snappy and the more basic, the better. Remember, simplicity is key to people reading it who are unfamiliar with your industry.
The Federation of Small Businesses (FSB) has more help and guidance on writing a business plan. There is support on the Government’s own website and several banks and financial institutions can also assist with templated guides.
At Westcotts, we are business advisers and are there for you, so there is simply no better place to start than by talking to us first. Get in touch with for more information or advice.