Every new business needs a business plan not just to assist in raising investment but also to guide the development of the business. Research consistently shows that businesses with a business plan out-perform those without one, and that those with a realistic and comprehensive plan out-perform those whose plan does not cover all the bases and is more of a dream. So what aspects should your plan cover? Here are the essentials.
Vision
Explain the dream. What is it that makes this business exciting to customers, suppliers and most importantly, to you?
Background
Share something of yourself. Explain why you want to start this business, why you are the right person to do it and why the world is ready now for your products and services.
Goals
Explain what success will look like in terms of turnover, profit, customer numbers, market share etc.
Products and services
Describe your products and services, how they have been developed and tested and the evidence to demonstrate they are fit for purpose.
Competition
Explain who your competitors are and how you will be different? The differences are crucially important as without knowing them you will not succeed.
Market research
Set out the research you have done to establish that there is a market for your products and services and that customers will actually buy them from a new supplier.
Marketing strategy
Explain how you are going to promote the benefits you offer to those you seek as customers and how your products or services may evolve in response to customer feedback or market changes?
Sales strategy
Set out how you plan to sell your products and services, i.e. directly to customers, via third parties, on-line, mail order etc.
Costs
Include a detailed cash flow forecast for at least the first year and preferably, first three years. Provide notes to explain the bases on which each cost has been estimated.
Performance management
Explain how you are going to measure your performance against the goals you have set and the frequency you plan to do this.
People
Provide details of the experience and qualifications of those in your team and explain why they are the right people for the job.
Funding
Explain how you plan to raise the capital to fund the business. If seeking investment capital, set out the return investors are likely to receive and when.
Exit strategy
Whilst it might seem odd to include an exit strategy in a start-up business plan, experience shows that this is a good time to plan one. Do you plan to sell, create a family dynasty (check what your kids think about this), just pack in when you feel the time is right or have something else in mind?
