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How To Write A Business Plan
Writing A Business Plan
Writing A Business Plan
Writing a business plan is essential for your own business planning and it is useful to get your skills in order and so you can decide what skills will be more suited to build your business and also what your strengths and weaknesses are, a business plan should cover all the steps you need to take and other aspects you will address to achieve a business that will have the foundations of a strong business.
Business description/Executive Summary
This is the area that usually appears right at the top of your business plan and it should describe clearly what your idea is and what and how you will make money from your planned business idea, this should be no more than one paragraph as a clear statement of your business can be used for any potential financiers to read and gain an understanding of your proposal of business intentions.
A few examples of what should be included are 3 main points:-
- The business summary - What your business is.
- Business aims - What your business will do.
- Financial summary - A brief sales forecast or quick market share analysis.
Additionally right at the top should be your name and a working business name that can relate to your businesses description and also any other contact details that you feel are relevant.
Alot of people fall after this step as they aren't sure what comes next or even what properly to include within their business plan, but really it is about a plan that you can adapt and follow with the right amount of organisation to see how everything will work in your business, now if you're really into your niche then certain parts of it like the market research and the expected cash flow will be really easy.
For those in the UK, the Princes Trust may be the best option for 18 - 30 year olds to get help and additional support for starting their own business and that's the route I went and am nearly completing my journey to a fully operational online business and that to me sounds more exciting than a job working for someone who doesn't give a rats arse about you, only the companies success.
In any part of the world there should be certain advice about starting your own business and the Internet I believe connects all that information, you just have to sift through some of the not so clever information out there and take on board alot of business advice from those are in business themselves for it to really matter and be relevant for you.
Background history is just as important as it may prove useful for others to read about how past experience has made this decision of confidence within you to start up your own business and you may already have skills that are vital in your market area, so include all this here and bare in mind it doesn't have to be that long as you can condense your skills and work experience and only include the relevant sections that relate to your business idea.
If you are planning an online business, then include sites you already participate in, but again only if they relate to your business proposal, as drunken pictures of you on Facebook with an inflatable doll isn't relevant at all.
Qualifications can also be noted down here too, together with any future training you know you may need to advance your knowledge in a key area and also any training done in the past.
Services And Products
This is the detailed area of your business plan that needs to be fleshed out and it may take you some time to think about your product or service realistically, as you need to determine what you are going to sell, product or service or both, also include a section here on any early plans for future products and services and how you hope to integrate them into your business.
I think this is one of the most important areas of your plan as you can identify early on what you are going to sell and focus on it throughout the production stage and carry it onto the marketing plan for the actual selling.
This is another area that needs some research into what you know about your niche market and also identifying who your customers are, existing businesses or individual customers?
Also you may need to know where your customers are based and what may make your customers buy your product or service, as knowing your customer has many benefits to any business as they can tailor marketing and promotions to them and make them more targeted to buy or get involved.
Taken from your market research you can identify potential customers by asking them to fill out questionnaires, answer questions in online forums and generally being helpful on blogs and other community websites and social networks.
A marketing strategy
Now you need to look at what you intend to do with your marketing, are you going to market online or offline or both? and you need to be testing this kind of stuff out, to see what works well for you and what doesn't, but if you haven't started a business yet you only need to look t the marketing methods and jot down what ever you want and then when it comes to testing your marketing you can drop what isn't working for you.
Also, you will need to think about setting a marketing budget and this is something that will become more important when your business is in full swing as you can alter your budget to suit your earnings results, but anyway at the start your budget will be an unrealistic amount, so you will need to monitor this on a regular basis to see if it cost effective.
Your market research
As mentioned above this incorporates all of your combined knowledge and research that any business has to do, to see what other existing businesses are doing, but also to see if you can own a share in your intended market ready for business.
Desk research is anything that can be done by you just reading and finding information on and this takes the form of graphs, pie charts and other market share statistics that you can go out and find about any business area, then you do what is called field research which is customer orientated and you can ask questions in online forums, give out questionnaires for people to fill out, the key here is to see what customers want that will in turn support your businesses reason for being, because if there is no demand for products or services in your area of business, then there is no business!
Your field research can include any test trading done and you will point out your key findings that will support your business with actual examples of products purchased or results of a test trading campaign to test the waters of your idea.
This can be included as part of your market research and will form a review of your competition who are directly or indirectly competing with you, you may want to keep a competitor record table to show the top competitors who you have your eye on and want to watch over the coming months.
By studying your competitors, you will gain an understanding of how they operate, but the idea is to get one step ahead of them if at all possible and the important areas you need to look at from your business point of view are their strengths and their weaknesses as this will help you assess how you go about doing business alongside them or against them.
USP - Unique Selling Point
Every business has a unique selling point and so you need to think about your business as having a unique need that people will buy your product or service because they believe that they cannot buy it elsewhere at that price whatever that may be.
Maybe you provide more value in your product or service than anyone in your niche, so you state this as a USP and show some evidence to back it up, although sometimes a simple tag line will do.
Some businesses are very different and only you may know how your business operates and if you don't then you need to find out, whether you actually need premises to get started and production costs together with payment options for customers and actually how you will deliver, this step deals with the customer fulfilment end of a business and you only have to describe how each section will work in your business.
Suppliers may be mentioned here too and this can be used for your own way of contacting them in the form of a list and how you dealwith them, whether you pay them in cash or by cheque or any products you buy from them regularly.
Any equipment you already own or intend to buy must be noted here for your own records, so you know what you have and what you need in the future to grow your business or make it more productive, also comes in useful for tax purposes as you'll then know what to offset against tax to re-claim as a business expense.
Other things that could be important:-
- Staff or employees - Whether you will need to take on extra staff.
- Any legal requirements - licenses or other laws you should know about.
- Insurance cover - Insurance requirements of equipment and premises.
- Travel/transport - Any transport needed?
Costs - Incoming and Outgoings
You need to keep track of all of your costs, such as utility bills and estimate your grocery bills and any other money outgoings and then money coming in too, to separate from your costs to see what your profits will be.
Also to do with your products or services you need to put a value on the costs associated with that, so if for example you have a production line, you will need to know how many units you are going to create and then include the total product/service cost, plus the cost of your time to create it, plus all the other pricing factors such as:
- Number of hours work per product
- Cost per unit or item
- Profit margins
- Actual price per unit
- and possibly profit margin percentage
Your cash flow comes into effect here as you can estimate how much you hope to earn as profit in the first 6 to 12 months.
Writing your business plan is an ever evolving thing and shouldn't really be done once, it should be something that is refined over time once you gain more insider information within your market, in particular your marketing plan and your market research should be reviewed every so often to see if it still is accurate and reflects your current market position and stance on the way you run your business.
Read the links below for further detailed business plan writing information.