5 Reasons To Write A Business Plan

new business
I would encourage anyone planning to start up a new business to invest some time in creating a Business Plan first. There are many different things you need to consider before starting a business and going through the business planning process is the best way to ensure that you have really thought through everything you need to. A little time up front can save a lot of grief later on and greatly increase the chances of your business being successful.

RELATED: Guide To Writing A Business Plan

Here are my 5 top reasons why you should write a Business Plan.

1. To Show You Are Serious

By writing a Business Plan you are demonstrating that you have properly thought through every aspect of your idea and the plan itself shows exactly how your business will work and why it will be successful. The fact that you can demonstrate through your plan why there will be a demand for your product or service, who your customers will be and why they will buy what you are offering, puts you a big step ahead of someone who just thinks they have a great idea.

This is important if you need to attract investors, partners and even employees and managers to work with you. All of these will need to have good reason to risk their money or their livelihood with you, and your Business Plan can help give them the confidence and assurance they need.

2. To Spell Out How Your Business Finances Will Work

An essential part of your Business Plan will be financial projections. The rest of your plan will ultimately all feed into your projections for income and expenditure during the first years of your business. This will help ensure you (and others) have a clear understanding of where your revenue comes from, what your sales targets will be and any cash flow issues that you need to address.

This work should also show whether any capital investment is required to start the business and identify any times when funding will be required to cover periods of negative cash flow. This information will be vital in attracting any investors or partners. The future viability of your business could depend on being properly prepared in terms of cash flow, as this is what kills many small businesses which are otherwise perfectly profitable and viable.

3. To Ensure You Understand Your Customers and Competition

You may think you have a fantastic idea, but if no-one is interested in buying what you are offering, or if they can get it cheaper or better elsewhere, you don’t have a business. An absolutely crucial part of the business planning process is to identify who your potential customers are and who your competitors are. You then need to be able to clearly show why these people will become your customers. You do this by providing evidence that there is demand for your product and that you can provide something that that will make people choose you instead of your competitors.

You do not know if your business is truly viable until you undertake this work. You also need to show a clear understanding of any trends in your industry or changes in the marketplace. How big is the potential market and is it growing or shrinking?

4. To Spot Potential Problems In Advance

Writing a structured plan forces you to properly challenge any assumptions you have made and can bring to light potential issues that you may not have considered before. By facing up to these things in the planning process, you can identify ways to avoid or deal with them so that they do not become unforeseen problems when your business is up and running.

The flip side of this is that the planning process can also identify new opportunities and whole areas of business that you may not have considered before.

5. To Measure Progress And Keep You On Track

A good Business Plan is something you can refer to when your business is up and running to ensure you are not losing focus or getting side-tracked into areas you had not intended being involved in. By setting out financial targets and key milestones in advance, you can measure your actual performance against these to see how you are progressing.

Your Business Plan spells out exactly what you want to achieve in your business, so referring back to it can help ensure you are focusing your efforts in the right areas.

Further Reading

The Resources section of this site provides a step by step guide to writing a business plan, and other resources for small businesses.

12 Easy Startup Business Ideas

new business idea

Are you itching to start up your own business but not sure where to begin? The right business for you will depend on your own particular experience, skills, personal interests and abilities. In this article there are twelve ideas to get your creative juices flowing and help you identify the type of business that would suit you best.

The ideas below are chosen because they do not require a large investment up front and they can usually be started gradually, even while you are doing another job. In general it is better to start small and build up gradually once you are sure that your basic business model works and that there is a demand that you can satisfy. Jumping straight in with a large investment is by its very nature far more risky.

Some of these ideas will require certain skills, but I have tried to avoid suggesting anything that is going to require more than a short course to get you going.

1. Be A Market Trader

Being a trader on a market is really just the vehicle you use to sell your goods, but what you actually sell is entirely up to you and still leaves you an enormous amount of choice. Markets come in all shapes and sizes these days and there is no limit to the type of goods that you can sell. The good thing about markets is that your only overheads are the cost of the pitch on the day and the cost of the stock you are trying to sell. This is a very low risk way of testing out whether there is a demand for a product, or whether you have got your pricing right.

Remember that Alan Sugar started out this way, so there really is no limit to where it can lead. It is also no surprise that candidates in The Apprentice regularly have to use markets or market stall type approaches in their challenges. It is business in its most basic form – you buy something at one price and sell it at a higher price. It is a great way to test out your business idea before risking a bigger investment.

You will need to find out who runs the markets you are interested in and how to get a street trading licence. None of this costs much, but you are unlikely to be able to walk straight onto a great pitch in an established market. You will want to start off as a casual trader to begin with anyway, as you need to know you have a viable business before committing to a longer term agreement on a stall.

2. Sell Goods Online

The online version of market trading, which again is very low cost and therefore low risk. The most basic way to get started is using a Shop on Ebay, but you could also set up your own e-commerce website relatively easily.

You can be as specialised as you want to be with online selling and your market place is literally global. You can even set things up so that you do not buy goods until you have already got a buyer for them. Just make sure you have thought through the logistics so that you can deliver an efficient service from day one. This will help to build up all important positive customer feedback.

3. A Fast Food Stand

Fast food is not what it used to be – in a good way. There are a growing number of interesting and artisan food outlets that sell from vans and stalls. Sometimes the demand and following that these generate can lead to bricks and mortar businesses.

With any type of food or drink business you need to contact your local council to check what licenses you need and ensure that you are complying with any regulations. Do this at the start to avoid being caught out later. Your basic equipment does not need to cost much and as with a market stall you will need to make arrangements for what pitch you are going to operate from.

Another increasingly popular business that relates to this and the market stall idea is selling home made cakes and biscuits. Home baking is extremely popular now, or rather eating home baking is extremely popular. If you have a particular knack for it, cake decoration is another related field that can be lucrative.

4. Be A Virtual Assistant

With remote working becoming more possible and more popular, this is a rapidly expanding business at the moment. It is ideal for someone who wants to work from home with no initial outlay.

The range of possible tasks that you can undertake is extensive and it is up to you what services you decide to offer. Typical duties will involve a phone answering service and checking and replying to emails. You will need to decide how you are going to find potential clients, but there are websites dedicated to connecting freelance VAs with people who need them.

5. Copywriting

Another area closely related to virtual assistant services is copywriting. This is just being a freelance writer, producing pieces of writing for articles, blog posts, web pages, brochures or whatever else your client requires. This is a huge business, thanks in no small part to the current importance of good quality writing on websites. For a business website to rank well in search engines it needs to have plenty of original copy on its pages, and ideally a blog which is updated regularly.

People from all over the world offer very cheap freelance copywriting services, but the majority of these are just not good enough in terms of proper use of English. A native English speaker with a flair for writing can command a decent rate for original copywriting work.

6. Bookkeeping

This one could be for those more comfortable with figures. If maths is a trial for you, don’t even consider this, as you need to go with something that suits your natural ability. The fact that many people are not comfortable with figures is a reason why there will always be a need for people who can undertake this type of work.

You may need to do a short course or two, depending how far you want to go with it. You certainly do not need to be an accountant as you will not be offering those sort of services. The work of a bookkeeper can cover such things as raising invoices and credit control, payment of invoices, recording and reporting on all income and expenditure.

7. Car Valeting Service

I have become increasingly aware that fewer and fewer people are interested in washing and cleaning their own car and that it is increasingly something that people are happy to pay someone else to do. There is therefore a considerable market consisting of people who will jump at the chance to have their car cleaned at their home at a time that suits them.

8. Mobile Hair And Beauty Services

If you are lucky enough to have had training in hairdressing, this is an obvious choice if you enjoy that type of work. Even if you haven’t any hairdressing experience, the current demand for nail art has opened up a whole new area of work in that field alone.

As people lead increasingly busy lives, the idea of having these services at home rather than having to fit in a salon visit becomes more attractive. With a population that is rapidly ageing, there is only likely to be more demand for businesses that provide services in the home.

9. Dog Walking and Pet Sitting

Self explanatory, but this again fulfils a growing need. Things that people used to take for granted and do themselves are more and more being passed on to others who we are happy to pay for their time. There are literally millions of dogs in the UK, which all require exercise. Many people want dogs but do not necessarily have the time or inclination to take them out twice a day.

In addition to dogs there are many other types of pet too, all of which need attention while their owners are away on holidays or business. A personal pet sitting service is naturally seen as kinder to the animal than the standard kennelling service which is the alternative.

10. Driving Instructor

Another great example of a business that is flexible in terms of how much you commit and enables you to work from home. This is a business for which you will need to be properly qualified before you can start, which does involve an investment in time, effort and some money. Your main options once you are qualified are to be totally independent or to latch onto one of the well known franchises that give a business model and considerable help in finding customers.

11. Handyman and Gardening

If you are handy around the house and garden, there are always a host of jobs that people need doing. Compared to a generation ago, people are generally far less willing and capable of tackling maintenance jobs themselves, and far more likely to pay someone else to do it.

You can start as simply as coming up with a list of the type of jobs that you can do, produce a simple leaflet promoting these services and put it through the doors in your local neighbourhood.

12. Laundry and Ironing

Many people hate washing an ironing, which is what makes it such a great business opportunity. It is not complicated and is a good example of a business that you can start very small and gradually expand as you build up a reputation and regular customers.

What Next?

If you have a business idea the first thing you need to do is create a Business Plan, which will help you identify all the things you need to do to get it up and running successfully. There is a guide to writing a business plan in the Resources section of this site.

8 Reasons To Quit Your Job And Become Self Employed

Stressful job
There are of course pros and cons to being self employed and whether it is right for you will depend partly on the type of person you are. In this article we are going to look at the main advantages of working for yourself.

1. You Are Not Answerable To Anyone Else

This is probably the most important point and the biggest incentive for anyone to take the plunge into self employment. Most people who have spent some time working for other people will have experience of the frustration that can come from either having to spend time on things you feel are pointless, or not being able to do things you think are important.

When you are your own boss, you decide what is worthy of your time and what is not. If you can see no benefit to you or your business from a particular task then you can just decide not to do it. Similarly, if you think you are missing an opportunity or that there is a market that you are not tapping into, you can decide to spend time focussing on that.

2. You Reap The Rewards If You Are Successful

When you are an employee working for another company, you can be very successful and bring huge financial benefit to your employer while only getting s little or even none of the benefit personally. When you work for yourself you get the direct benefit of any success you have. No-one is setting a cap on how much you can earn, so your earning potential is unlimited. If you get the result you get the reward too.

3. More Flexible Working Hours And Time Off

While it is true that many self employed people work very long hours, they do so because their effort is in direct proportion to their personal reward. For many people self employment offers the opportunity to adjust working hours to suit your personal circumstances. This could mean working around child care duties or other calls on your time, or being able to take time off and move your hours around when you need to.

You need to bear in mind that no-one is paying you for any holiday you take, but at least you get to have full control over when you do or do not take time off.

4. Greater Job Satisfaction

The importance of job satisfaction should never be underestimated and you are far more likely to enjoy a high degree of satisfaction as a self employed person. Lack of satisfaction is common when you have little control over your work or when you cannot see the result or benefit from what you spend your time on. When you work for yourself you get a much greater degree of satisfaction because you control how you spend your time and you get to see the full result and value in what you are doing.

5. Freedom To Innovate And Try New Ideas

The only boundaries on how creative you want to be when you work for yourself are set by you. Perhaps you have worked for someone else and had a great idea for a new product or doing something in a more efficient way, but you have not been allowed to try it. When you are self employed there is no-one to say ‘no’ to your ideas, so only you can judge whether to try it or not.

Being an employee can make it easier to take a less critical view of your own ideas, because it is not your money that is potentially at risk. When it is your own business you have to make the call as to whether it really is worth committing your resources to. The key point is that you have that choice and freedom and if you really do want to try something, you can.

6. The Convenience Of Working From Home

Of course not everyone who is self employed will work from home, but many people start this way. If your business lends itself to this, there are some real advantages. As well as keeping your overheads to a minimum, which is key when starting a new business, you will also save time and money in not having to commute to a separate place of work.

Working at home gives you a lot of freedom and choice about how you organise your working day. While many choose to have a set start time and be dressed in a business like way, you also have the option of still being unshaven and in your underpants at 3pm in the afternoon!

7. You Get To Choose Who You Work With

Most of us have had jobs where you have to spend a lot of time with people you would never otherwise choose to see. This can vary from those you simply have little in common with to those who drive you absolutely insane.

If you choose to employ anyone in your business, you get to have full control over who you take on. You also get to define what their role will be and how they will spend their time. Even if you do not employ staff, you will still work closely with clients, suppliers and contractors. When you are your own boss you have some say over all of these too, which gives you much more control over who you are working with.

8. No Time Wasting Bureaucracy

Have you ever been frustrated as an employee in a company with the time it can take to get a decision made? If you have worked in the public sector the layers of bureaucracy can make progress and change even harder. As a self employed person you have the freedom to make instant decisions. If there is a process to go through, or checks to be made, it is only because you decide that is what needs to happen.

The freedom to make a fast decision can be very liberating if you have experience of having to wait for board meetings or committees.

The 7 Hardest Things About Being A Leader

Leadership is not a simple business and is certainly full of challenges. It comes easier to some people than others, but the key skills required can all be learnt. Everyone will find certain elements of being a leader more difficult than others, but being a good leader involves a range of skills that must be mastered. Here is my list of those essential elements of leadership which I think can provide us with the greatest challenges:

1. Outlining the vision and keeping people focussed on it:
One of the most fundamental roles of leadership is to articulate the vision of the business. The leader must know where the business is heading and what the overall purpose is behind all the day to day tasks and activities. Keeping everyone else focused on this and understanding why they are doing what they are doing is an ongoing challenge. It is all too easy to get side-tracked into detail, which can result in parts of the organisation going off at tangents and doing things that do not contribute to the aims of the business.

2. Giving critical feedback:
Developing the team and achieving high performance can only be achieved when people are given feedback on how they are doing. This will be both positive and critical, but sometimes it can be tempting to avoid difficult conversations about aspects of behaviour or performance that require attention. Leaders have to work to develop relationships with team members that allow open and honest communication about things that aren’t going so well, not just the good stuff.

3. Seeking feedback and learning from it:
The flip-side of giving critical feedback is seeking it and dealing with it appropriately. Employees are unlikely to volunteer information about things you do or fail to do that would allow them work more productively or develop. You as the leader need to actively seek this feedback and show by word and deed that what they say will not be held against them. When you get feedback it can take some time to digest and understand what you can learn from it. Resist the urge to defend yourself or justify your actions. Realise that this is how things are from where they are and consider what you can do about it.

4. Allowing others to develop:
A key part of your job as leader is to know when to intervene and when to get out of the way and let other people shine. Talented people are ambitious and want to play a real role in developing ideas and achieving results. Part of the leader role is to help people develop by providing support rather then giving them the answers. There is no point expecting to hold onto talented people forever, but your business will benefit most from them, and retain them for longer, if you help them to develop professionally.

5. Advocating change and following through on delivery:
Leaders have to be the one person in the organisation who loves change. It is a well known fact that most people do not welcome change and many will actively resist it. You are not leading your business if you are not looking for and dealing with continual change. Delivering on long term aims can be really challenging if it involves significant changes. It can be difficult anyway, but when the aims involve making changes, it can take a huge level of energy and commitment to take other people with you. It comes down to the leader to be a consistent source of energy who will stay focused on carrying changes through to delivery.

6. Admitting when you are wrong and saying sorry:
One of the qualities of the most effective leaders is that they are ‘human’. People can relate to them as real people who, like them, have home lives, personal feelings and the same human frailties as anyone else. Everyone makes mistakes and it is important to acknowledge your mistakes rather than pretend that you are perfect. So accept that it is normal and acceptable to make mistakes and be open about admitting these promptly and apologising if that is appropriate.

7. Staying positive when things go wrong:
Failure is an unavoidable part of business and there are of course times when things are not going as well as you would like them to. The leader plays a vital role in setting the tone of morale in an organisation. People will look to you as an indicator of how things are and what this means for the business. For that reason you do need to remain positive even when you do not feel that way.