Write your first Business Plan

December 28, 2012 under blogs

You’ve got the idea, you think it’s a winner – now all you need is a clear, concise Business Plan!

Deciding to become an entrepreneur is very exciting – and once you’ve found your big idea, you have to move forward. If the thought of writing your very first business plan throws you in at the deep end, don’t worry – you’re not alone!

Untrodden paths can be intimidating – because how do you know what goes into a Business Plan when you’ve never written one? With that in mind, we’ve come up with a simple guide to writing your first Business Plan that we hope makes it a bit clearer.

Section1 – The Summary

What’s this bit about?
– This is a synopsis of the key points of your entire plan, mentioning a little bit of everything from every other section of your Business Plan.
– It should be no more than two pages long, and as interesting and informative as possible. Remember, bank managers are busy – it may be the only part of your plan that actually gets read.

Why do I need it?
The point of the summary is to get the person reading it interested in your ideas, and give a very clear idea of exactly what those ideas are, and how they’ll be carried out.

MOO Top tip:
Write the summary last, not first. It will be much easier to highlight the most relevant key points after you’ve written the entire thing up.

Section 2 – The Vision

What’s this bit about?
This is where you describe very clearly an overview (or your vision) for the reader of exactly what it is that your business is going to do. It’s the “Who, what and where” of your plan.

What goes in it?
– Who you are
– What your business does (and which sector it falls into)
– The history of the business (is it brand new, or have you inherited an old one that you want to revamp?)
– The launch date of the business
– Your plans for the future of the business

MOO Top tip:
Keep your language direct and to the point. Nobody is impressed with fancy language – the simpler the better. If you’re not sure, get a friend to read it through and let you know if it makes sense.

Section 3 – The Marketing and Sales strategy

What’s this bit about?
The marketing strategy is where you explain why people will want your product or service, and the Sales strategy shows you’ll get them to buy it. Simple!

What goes in it?
This is where all that research you did when you evaluated your business idea gets put to use!

The Marketing section is made up of your answers to the following questions:
1.The market – how big is it, what are its general patterns and what factors are currently affecting it?
2. The customers – who are they, how old are they, what makes them interested in what you’re offering?
3. The competition – who are they, what do they do, how do they do it, their strengths and weaknesses and how big are they in the market?
4. The future – are there expected changes in the market you’re aware of, how will this affect both you and the competition?

The Sales Strategy is made up of your answers to the following questions:
1.The customers (again!) – who has already shown interest? How will you go about attracting more people like this?
2. The pricing – do you have a system? If not, what research will you do to put one in place?
3. The promotion – how to you plan to spread the word – direct mailouts, advertising, email, PR etc?
4. The sales – will you go door-to-door, over the internet, telesales, retail or a different plan? Do you have the skills in your team to manage this?

MOO Top tip:
In this section, make sure you also outline a brief contingency plan to show you understand that markets, sales and customers are not static, but can change at any time.

Section 4 – The people

What’s this bit about?
Who you decide to work with is important to potential investors. They want to see that they are handing over funding to a person who values skills and expertise (and has some themselves!)

What goes in it?
Show whoever is reading your plan that you have the right balance of skill, ambition and experience to make this business a success. Key areas to highlight are:
– Sales
– Marketing
– Finance
– Operations (the day to day running of the business)
– Training and recruitment plans

MOO Top Tip:
Plan how much you intend to pay each person and why they justify their salary (based on what they will contribute) – this kind of attention to detail will show potential investors you’re committed.

Section 5 – The Operations

What’s this bit about?
This is all about practicalities – where you will work, what facilities you’ll need, and how much it will cost to get it all up and running.

What goes in it?
Quite simply, information – focused on the following areas:
– Location – where will you be based? Do you own or rent? Is it a good location? Do you need to make a physical product here, and if so, will you need money to do so?
– Management system – do you have a system in place that can manage the information of your business, like stock and supplies? If not, will you need money to get one?
– Technology – what IT capabilities do you have? What do you need that you don’t already have?

MOO Top Tip:
Don’t hide anything here – if all you have is an old PC from the eighties, there’s no point in pretending that will be enough to run a business because it won’t, so say exactly what you need.

Section 6 – The Money

What’s this bit about?
In one word – numbers. This is the bit where you take all the previous information about your new business, and convert it into figures and financial projections. This is so you can show you will be able to survive in business for at least 12 to 18 months while paying salaries. (Obviously if you’re not great with numbers, you might want to get someone to help you out with the details!)

What goes in it?
You’ll need to provide a 3 – 5 year plan for the following:

– How much investment you’re looking for (if any)
– How you plan to pay it back, and by when
– Where your income will come from

You’ll also need to write a detailed 12 month forecast which includes:
– Sales forecast
– Profit and loss forecast
– Cashflow statements
– Contingency plan forecasts (in case business is slow)

MOO Top Tip:
Include a section on Risk Analysis – it shows you are thinking clearly about what might go wrong. This includes unexpected actions from the competition, failure of your equipment, acts of God, and problems with sales and deliveries – anything you can think of that might affect your ability to function smoothly. Again, if you don’t know anything about it, speak to someone who does – start by asking someone who already runs their own business to point you in the right direction.

And that’s it. Give yourself a pat on the back – you’ve just written your first Business Plan! Obviously it’s only a first draft, so you’ll need to get it checked by someone experienced, but once your ideas are all down on paper, the hard work is over. Well done!

Want to have a look at what a professional business plan looks like? Check out Smarta – they’ve got loads of great examples that cover all sorts of industries, so have a look around, get inspired and see what feels right for you.

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