Thinking About Writing a Business Plan?
by Heather Townsend
The Efficiency Coach
Geoff Burch, business writer, has likened the writing of a business plan to trying to pin a jelly to the ceiling. For me, a well-researched and thought out business plan is a cornerstone of business efficiency.
But, what does a business plan do – and who needs to write one, and what should you include? In short, a business plan helps to clarify your thoughts, as well as consider essential elements for your business survival and future growth. Oh, and if you are seeking outside investment or money from your bank, they will want to see a business plan.
By the way, your business plan should be written by you. There are lots of people that will write it for you, but as you will be living and breathing your business for the foreseeable future, you need to own your plan as it’s your business. It may take blood, sweat and tears to write (and at times you will hate me for making you do this), but it will be worth it in the end.
So, what are these essential elements that you should include in a business plan?
1. What do you want to achieve?
Keep these clear and simple, but they should contain what you plan to achieve with your business over the next 1, 2, 3 and 5 years (and, further into the future, if you have the vision).
2. Personal background
So, what qualifies you and the rest of your proposed team to run or build up your proposed business? It is worth doing a SWOT (strengths, weaknesses, opportunities, threats), analysis for yourself and your team. For example, when I was thinking about my business plan – one of my strengths was the fact that I have a great track record, (plus professional credential from International Coaching Federation), of helping people achieve more. But, a weakness and opportunity for me, was that when I was setting up the business I had a small local network. In this section, do consider what would happen if you had a major health problem.
3. Your suppliers
Who are they? What payment terms are they asking? Someone that only wants to get paid in 30 days is better to do business with than someone that wants paying up-front! As a service provider, my suppliers are generally not critical to my success – unless of course I want to employ associates! But if you intend to supply a product, for example organic drinks, this section is critical. You may like to consider how your suppliers will help you and your business grow.
4. Your target customers or clients
So, who is going to be buying your product or hiring your services? Most importantly, how are you going to build awareness of your product/service with your target market i.e. the people who you want to be buying your stuff? You should focus on 3 main ways that you are going to get your brand in front of your target market. This is often talked about as your channels to market.
Who is also targeting your customers or clients? What makes you different? What needs are you servicing for your customers or clients? What are your customers or clients prepared to pay for your services? For example, I work with entrepreneurs and professional service firms. A key need for an entrepreneur is to write a business plan. So, let’s look at my business plan... How am I helping service an entrepreneur needs? My firestarter coaching package for startup business owners gives them the necessary focus, thinking time, encouragement and advice to write their own business plan in 6 weeks.
5. Bits and bobs
Even if you are working from home you will still need equipment to start up. This is the part of the plan where you consider a list of premises and equipment that you are going to need for your business. If you are planning to work from home, how are you going to make it work around the needs of your family?
6. Legal issues
There is no getting away from it, you will need to consider how you will trade – Ltd, Sole trader, LLP, partnership. If you don’t consider it and don't take the appropriate action with HMRC, they can get very shirty. As the business owner it is your responsibilities to keep the business safe and legal, e.g. insurance, licences, health & safety. Very often a business link adviser will be able to help you identify what you will need for your business, for free.
7. The money stuff
Unless you are planning to run your business as a hobby, then you need to forecast how much you will sell (or bill), and what your fixed and variable costs are going to be. Fixed costs, such as rent, are stuff that wouldn’t generally change regardless of what you sell (or bill). Variable costs, such as material costs, are stuff that will go up the more you sell (or bill).
8. Key people
It’s not quite the place for your Hollywood acceptance speech, but this is where you detail all your professional advisers. For example, this would be the place where, if you were using a business coach, you would explain how the business coach will keep you accountable to your business goals and support you through the tough phases.