A business plan is a written document that defines your business. It covers everything from the products and services you will sell, to your target market, plans to hire staff and financial forecasts. Creating a convincing business plan can help to take you where you want to go, but what details should you include to tick all the right boxes?
1. The executive summary
This essentially acts an introduction to your business plan and includes details of your company and the products or services it will sell. At this point you should not go into too much detail, but instead provide a concise, clear outline that will catch the reader’s attention. You should think of the executive summary as your elevator pitch moment. This is your time to shine, so try and make it memorable. Two or three sentences should be enough to describe your business’s goal.
2. Define your target market
Who are your customers and what do they look like? It’s essential you have a clear idea of your target market and have carried out research so you know demand for your products and services exists. This is one of the first questions an investor will ask, so make sure you know:
• Who are your customers? – Is it other businesses or consumers? If it’s other businesses, who in those businesses will you be selling to?
• How often will they buy? – What type of customers will your business attract? Will it be one-off sales or customers who back time and time again?
There’s no room for guessing here. You need to identify who will buy from you and why. This includes their demographic, such as age and gender, their location, the amount they’re likely to spend and their profession etc.
3. Identify the opportunities
What opportunities exist for your business? It’s important to spell out exactly how you plan to make your business a success. Will you take advantage of gaps in the market online, and if so, how? Perhaps you’ll sell at a lower price than the competition, but how will you manage to keep the quality high enough?
You should also identify the opportunities you hope to capitalise on as the business grows. Will you open a bricks and mortar store? Perhaps you’ll look at opportunities to become a franchisor?
4. Understand the competition
Whatever market you’re in, there’ll always be competition. Even if you’re the first to market with a particular product or service, there will still be alternatives your customers could choose to use. As part of your business plan, you must show you have a firm understanding of the market. You can do this by:
• Identifying your direct and indirect competition – Which companies sells the same products as you? Do other competitors exist in overlapping markets?
• Discussing the barriers to entry – What makes your company difficult to compete with?
• Defining your USPs – Why will a customer buy from you rather than the competition?
5. Create a financial forecast
You don’t want to get bogged down in the financial details, but it is essential you provide a financial overview of the business. This should include:
• The cost to make or buy your products
• The price you sell your products or services for
• Staffing costs
• Marketing costs
• Fixed and variable overheads
If you’re struggling to put the financial details together, this is something that Prosper will be able to help you with, just give us a call.
6. Outline your marketing plan
How do you intend to make your business known to the customer? A basic marketing plan should cover each of the following elements:
• Price – How much will you sell your product or service for?
• Place – Where will you sell it?
• Positioning – How does your offering fit in the overall market?
• Promotion – What channels will you use to attract customers?
7. Find the right people
In your business plan it is essential to outline the key employees you will need and how you will attract them. As well as hiring the right employees, you may also need trusted mentors and advisors that you, as the business owner, can turn to for help. But where will you find them and what kind of assistance do you think you’ll need?
8. Keep it simple
That might sound like a lot of detail to include in your business plan, but you really should focus on the barebones of each. A long document won’t be read, so keep it short, concise and to the point. A lender or investor can ask you for more details if they need them, but a short document (just a couple of pages long) is the key to taking you where you want to go.
How can we help?
Prosper provides a comprehensive approach to accountancy, tax & business growth services for startups across the UK. We are your bookkeeper, accountant and finance director all rolled into one. Check out prosper.accountant to learn more about how we can help your business.