A good business plan can stand you in good stead when you’re about to start, but also great to refer to as time goes on. It should contain everything from your business does, how it makes a difference to how much profit you expect to make over time.
We’ve pulled together the best advice when it comes to forming a good business plan so even if you plan to use a free template online, be sure that it covers these points as a bare minimum.
Make sure your plan is clear and readable, we’d suggest keeping the length to a 15-minute read, including only essential information but including additional detail in an appendix should a reader need more. An executive summary should also be included at the start (but written at the end) which includes the business opportunity, proposition and why it will be different to competitors. Use clear and jargon free language, we usually find getting a friend to read over it can be helpful to see if they understand it. And it’s always nice to get a bit of moral support!
2. What do you do?
This is all about defining your business, the who, what, where, when and why? Be specific about the service or product you will offer with a good description. So instead of simply writing ‘hair salon’ you should write: ‘This is a mobile hair salon business delivering colouring, cutting and styling service throughout the Bristol area. Our fleet of mobile hair stylists provide beautiful styles using organic hair products directly in the comfort of your own home.’
Then you should also think about your objectives, what will you deliver in the first year following by the longer-term goals including financial targets in years 2 and 3.
3. Are you qualified?
It’s obviously important to show off the skills and experience you have in order to be able to run this business. Including a few lines about your keys skills, education, courses, transferrable skills or even attaching your CV as an appendix can all be useful in convincing investors. You should also consider where you might have skills gaps in the business and how you will tackle them through recruitment of the right people to support you.
4. Who are your customers?
It’s essential to the plan that you show a clear understanding of who your customers are or could be and what they’re looking for from your product or service. Consider the following factors when it comes to your customers:
- Research, focus groups, surveys
- Customer demographics
- Location and how many people you could reach in that area
- Customer segments – what are their characteristics?
- Customer needs
- Pricing coupled with how much a customer is willing to pay
5. SWOT analysis
Short for strengths, weaknesses, opportunities and threats. You should have a good honest think about all of these things and be sure to include how you will address them. Threats should include your competitors and a bit about them and their pricing and how you compare.
6. Getting in front of your customers
In other words, marketing! This section should detail how you will be seen by your customers, how you plan to sell and what your marketing goals are. You should consider:
- What channels you might use?
- Summarise some planned marketing activity on those channels
- Detail your sales processes – how will you sell your product or service?
- What are your key messages and how will you communicate them?
7. How are your operations made up?
You’ll want to detail supply chain, management roles, staffing, IT and systems you plan to use, any machinery or specialist equipment that you require, premises, assets, legal or regulatory considerations, insurance and any risks or weak points in your operations.
A cash flow forecast will come in handy here and there are lots of templates available online. If you’re already in business then historic data will be useful, but if you’re just starting out then you want to create a year-one forecast including any costs and key assumptions.
Of course, if you need support, our handy new business start-up packages are here to provide you with the tools you need to pull everything together! Take a look.