Creating Your First Business Plan
If you have a great business idea, then it makes sense that you’re keen to move forwards. However, this can mean that we’re running before we can walk, which means that the business could come up against some obstacles with no contingency plan in place. This is where a strong business plan can come in handy, but where do we start and what do we need to include?
What to Include
It stands to reason that no two businesses are the same, so every business plan will be unique in some way. However, there are sections that you should look to include.
Executive Summary: Although this will appear on the front of your business, it’s often something that is created at the end of your business plan. This is because it summarises all your goals and encompasses the tone of the business. This includes how you will go about financing the company, and what potential obstacles there are within the industry you’re looking to operate in.
An Overview of the Company: This will detail the foundations of your business. You should look to describe how the structure of your business works, where the business is located and the mission of the company.
The Products and Service Your Business Offers: This section will look at what you should offer in more detail. As well as providing what your business offers, you should also detail how the product or service on offer from your business helps potential customers. If you’re selling a physical product, then it can also be useful to include details as to how it will be manufactured and distributed.
The Goals of Your Business: When starting a business, it’s important to have goals in place. Knowing which direction you want to take the business in allows you to build a more robust form of measuring success. This will ensure that if there is an opportunity for expansion, then the business is prepared.
The Business Financials: There can be a lot of financial outlay involved when starting a business, and for a business to survive, it has to ensure that it has its cash flow in order. Things to include are marketing costs, how much it will cost to host your website, the design of stationery and other vital aspects of the business. You can also include how you plan to stay within budget, and detail contingency plans put in place should there be any disruption with your cashflow.
Your Marketing Plan: The launching of a business can mean that we need to look at various advertising methods. There are several options available, you just need to ensure that we’re employing the service of a company or product that works for us. This can mean carrying out some research and detailing the channels we plan on using.You should also look at how each platform can benefit the business and yield a return. You will also need to consider thing such as website hosting, this is a great guide that includes the best web hosting rankings that I would always recommend that you look over. You may also want to check out this guide which is another great hosting resources which can by used by new businesses who are looking to launch online.
The Purpose of a Business Plan
It would be easy to assume that we only need to create a business plan if we’re looking to raise capital for the business. While this can be one reason, there are other benefits of ensuring that you have a completed business plan before moving forward with your idea.
In some instances, there will be occasions where a business looks to take on another business partner. For your proposal to be attractive, you need to ensure that there is plenty of information available to those showing an interest. It is often the case that business partners will invest capital into the business, and will be keen to know how their money will be used, and how the business hopes to make a return.
You may also be asked for a copy of your business plan by your bank. This could be in relation to a loan, or the opening of a business account. Whatever the reason, you can ensure that all questions are answered by having a copy of the business plan available.
Another use for a business plan is when a business owner plans to exit the companies. There can be several exit strategies which include, but are not limited, to the following:
- Management Buy-Outs
- Acquisition by Competitors
- Family Succession
- Initial Public Offering
Just because the current business owners are looking to exit doesn’t mean that there is no value in the company. In fact, there are many mergers and changeovers that occur on a regular basis, especially with more recognized companies.
However, if there is no business plan, then it can be hard to give a valuation of the company. With a business plan, even if the worth of the company is hard to establish, the opportunities can still be clearly highlighted.
Who Should Write the Business Plan?
The preparation of a business plan can seem like a cumbersome and time-consuming task, and in some respect it can be. As such, it can be tempting to outsource the work to someone else. While there is no problem doing this, you do run the risk of having a business plan completed that doesn’t reflect the true nature of your business, as only the owner of the business knows how it should be presented.
It can be advisable for you to create something yourself, even if it’s only used a draft. Even if you’re not too good with words, you should try and outline the purpose of the business and the message it’s trying to relay. The more information you’re able to provide, the better your business plan will be.
If you do decide on using someone else to create your business plan, ensure that you review it before sending it to anyone else. Even a few spelling errors can devalue your business to some.
As you can see, there are several benefits to creating a business plan. While it can seem like a large chunk of time being used up, the preparation of a business plan will save you time moving forward.