Ten Steps To Creating A Business Plan For A New Business

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Any Business Plan should contain the same key elements, but a startup business will require a particular focus in certain areas. If you are setting up a new business, your business plan is likely to be a vital tool when seeking investors or funding, so it must be well researched and present a solid business case.

By splitting your business plan into 10 key sections you can outline all the key areas that any investor will want to know about how your business will work. These 10 sections can be summarised as follows:

1.Contact Information and Executive Summary

First things first – make it obvious whose plan this is by putting your business and personal contact details right at the beginning. This should be followed by an Executive Summary, which has to summarise the rest of the plan and give an overview of how your business will work. Get this right, because if it does not engage the reader, they may not bother looking any further. You will almost certainly have to write this section after you have completed all the other parts of your plan.

You could also include an elevator pitch in this section. The term elevator pitch comes from the idea that it is what you would say in the time available if you met someone by chance in an elevator. It is a useful exercise to really focus on the essence of your business idea so that you can explain it in no more than a minute or two.

2. Background Information

Use this section to provide information about yourself and any other key personnel who will be involved in the business. Investors will want to know who they are backing, so you need to provide information about your relevant work experience, qualifications, etc. Provide CVs as an Appendix so as not to clutter up the main plan.

3. The Product/Service

Now we get to the guts of your business – what is it you are selling? As well as explaining what product or service you are providing, you need to say something about what makes is special. What is your unique selling point? Why are you going to succeed? Is this different to what anyone else is offering, or are you going to do it better than anyone else?

4. Your Customers

The quality or uniqueness of your product has no value at all unless someone wants it enough to part with their hard earned cash. This section is crucial in explaining who your customers are and why they are going to buy what you are offering. Are you selling to businesses or individuals? Perhaps you are selling to both. Either way, you need to identify these customers clearly. Who are they, where are they, how old are they, what do they do, etc.

5. Your Competitors

Any investor will want to be satisfied that you understand what the competition is doing and that you have a clear plan for beating them. Make a table of your main competitors, giving details of where they are located, how big they are, their pricing structure and what their strengths and weaknesses are.

6. Market Research

Making statements about your customers, the sector you are operating in and the size of the market place are meaningless if you have not properly researched the facts. As well as desktop research about the size of the market, current trends, etc., you need to do some specific market research to provide evidence that people really will use your business. Nothing has more value than actual sales or orders, but failing that, you need to have conducted reliable research and have feedback from your potential customers to show that there really is a need for what you are offering.

7. SWOT Analysis

This is a standard analysis of your business or idea to identify key points in the four areas of Strengths, Weaknesses, Opportunities and Threats. You only need a few bullet points under each heading, but be honest about it. When you identify potential issues under threats and weaknesses, always make sure you also include an explanation of what you will do in order to mitigate against these.

8. Marketing

You must have a clear plan of how you are going to communicate the message about your product or service to the people who will be your customers. Make headings for each type of marketing activity you will be undertaking and provide relevant details including costs. These can include direct sales, producing a website, online advertising, adverts in publications, direct mailing, attending trade shows, brochures and leaflets, social media, etc.

9. Logistics

Now you have to explain how you will do all the day to day stuff that is involved in your normal operation once you are up and running. You need to cover premises (where, why and costs), manufacturing equipment, office equipment, insurances, invoicing and payment systems, delivery and transport and something about staff management and the structure of your team.

10. Financial Forecasts

Last but most definitely not least, this section can include various details, but the key thing is a forecast of profit and loss over the next few years. Investors will want to know what sales you expect to make, what your costs are and what your profit is over time. You must be as realistic as you can with this. It can be hard to do forecasts when there is no track record, but just make sure you can back up any assumptions you have made with evidence or strong rationale.

You can read a full and detailed guide on How To Write A Business Plan in the Resources section of this website and download a free budget forecast spreadsheet.

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