15 Key Points To Include When You Come to Write a Business Plan
If you’re starting a business then you will probably need to write a business plan. But what is a business plan and what should it cover? Here’s some good advice on how to write a great business plan:
What is a business plan?
Basically, a business plan is a route map for your business. It outlines where you are now, where you want to get to, and how you are going to do it.
You don’t always have to have a business plan. But you might be expected to have one if you’re borrowing money from a bank or applying for a grant. It’s also useful to show potential business partners that you’re serious and professional about what you’re doing. You might even find it helpful to have one just for your own guidance.
What should your business plan include?
Now this is important: There is no fixed, right-or-wrong format for a business plan. It can include whatever you want it to include. However, here are some of the main things it should cover:
- What type of business will you be running? What will it be selling? Or what service will it be providing?
- What’s the market for your product or service? Is it local, national or international?
- Is the market growing or static? What market research have you done to provide evidence of this?
- Where do you plan to source your product from? Is there just one source, or several sources you can use? (It’s best if you have several, as a contingency.)
- What price do you plan on selling your product/service at, what will it cost you to provide, and what will your profit margin be?
- What competitors do you have in this market? What strengths or weaknesses do they have and how to you plan to address or exploit them?
- What’s your unique selling proposition – why will customers come to you rather than your competitors?
- What experience, skills and experience will you be bringing to the business? (If you have a CV then you can include it as part of your business plan.)
- If you plan to employ others, what experience, skills and experience will they be bringing to the business? If you haven’t found these employees yet, how will you find them? And what will you need to pay the right people?
- How much money do you need to start the business and how do you plan to raise it? What cash do you have? How much do you need to borrow?
- Where will your business be based? Will you run the business from home, or do you plan to find an office/shop/factory etc.?
- What methods do you plan to use to attract customers? For example, press advertising, direct mail, a website, social media etc.
- Are there any legal or regulatory issues that affect your business? For example, do you need a licence to operate it, or to sell particular products?
- What are the potential problems and risks involved in running this business? And what’s your contingency plan for dealing with them if they happen?
- What do you estimate your turnover (i.e. takings) will be in each of the first three years? (Tip. Estimates are perfectly acceptable, but try and make sure they are realistic and back them up with calculations.)
- What do you estimate your profit (or loss) will be in each of the first three years? (Tip. It’s perfectly acceptable to forecast a loss as long as this is part of your plan and you have the funding to cover it.)
It’s always better to underestimate your turnover and profits than to overestimate them!
Presenting your business plan
There is no minimum or maximum length for a business plan. Just write whatever you think is necessary to outline your plans properly. Try to keep everything fairly concise – business plans are typically between five and 20 pages or thereabouts.
If you’re sending your business plan to another party – such as your bank – ensure it is neatly presented and printed on high grade paper using a good quality printer. Including charts, tables, graphs and diagrams is a good way of getting over lots of information in a concise format and also helps your business plan look more organised and professional.