Business Plan Guide – Page 7

10. Logistics

white van
This part of your business plan is where you describe the mechanics of how you will achieve all the day to day functions of your operation. There are quite a few areas you need to cover in this section, including how you produce what you are selling, any delivery involved, how you get paid, any premises, equipment and machinery you need, insurances, licenses and other legal requirements and management of your team.

If you are producing or supplying a product for sale, you will need to spell out details of the production process. This should include how long the production process takes or how long it takes to receive products you order from your suppliers, as well as an explanation of how much stock you will carry, whether you insist on minimum order quantities and whether you extend credit or have payment in advance.

You should explain what payment types you will take (eg cash, cheques or credit cards). If you have a website will you have an online shop? Are you accepting Paypal or other forms of online payment? Bear in mind that there are costs involved in processing credit and debit card transactions and these need to be included in your financial forecasts in the next section. Just as importantly as working out how you will be paid, you need to outline how you will deal with invoicing people and chasing up overdue invoices.

If you are supplying a product you need to cover how your delivery system will work. What delivery options are you offering, how long will delivery take, which company is doing your delivery, are delivery charges included in the price of your product or are you adding an additional charge?

You should provide a list of key suppliers that you plan to use. You can include this as a brief table or add it as an Appendix at the back of your plan. You should be able to show that you are using the best companies for your purpose and getting good value. So do include a list of what you will be buying from each one, the cost and a brief explanation of why you are using that supplier. You should also list basic details of the payment terms that you have agreed, or expect, with each one.

Premises And Equipment
All businesses need some sort of base, even if it is only you working from home. If you are working from home, explain why that is the best option. If you are renting premises you will need to provide information about the amount of rent, lease details and why you have chosen the location that you have. Other things that you need to show you have considered and costed are utilities, such as gas, water and electricity, internet access and telephones, alarm systems and monitoring. You could also mention waste collection or recycling, which can be a substantial issue for some types of business.

Then there is the equipment that you need to deliver the service you are providing or the product you are making. This may be specialist equipment for manufacture of goods, or standard office kit such as computer, mobile phones, printers, etc. Point out whether you already own any of this equipment and if not, detail the costs for each item and where you plan to purchase it.

Your Transport
How will you or your team get around. Who is going out to meet potential clients and is there any need to pick up stock or deliver goods direct? You need to have a clear plan for your transport needs and show who will do what and how much that will cost.

Insurances And Legal Requirements
Nearly every business requires some form of insurance and you need to demonstrate in your plan that you know what you must have and what it will cost. The main insurances to think about are employers’ liability (a legal requirement if you employ staff other than your own family) and public liability (protection against claims by third parties). You could also have professional indemnity if you are offering professional advice or product liability if you are supplying a product. If you have premises of any sort you will need contents insurance and if you are delivering goods you should consider goods in transit cover too.

You should provide costs and be able to show that you have compared several insurers to get the best value. You can find out more about different business insurances and compare quotes from our homepage,

If there are any legal requirements relating to your business you need to spell these out and show that you understand what is required. Do you need legal advice and have you taken it already? Do you plan (or need) to be VAT registered, and have you contacted HMRC about this? Do you need any licenses to operate, such as premises licence or have you registered with your local authority if you are planning a food business?

Staff Management
Unless you are a sole trader, you will have some staff to manage. You should give details of who else will be in your organisation and what they will be doing. Show how your organisation fits together in terms of roles and responsibilities. How will you handle payroll, PAYE, etc?


Photo Credit: Van by Petr Kratochvil

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