A business plan is vital for any new business or entrepreneurial venture to succeed. It outlines how to reach your long-term objectives, while also generating a profit. But what do you need to know before creating this key document?
- Understand what your objectives are. Most new businesses fail within five years, often due to a lack of planning. It’s vital to identify what you’re trying to achieve, and how the company might grow or diversify. Companies often evolve in unexpected directions, so don’t limit its scope by choosing a restrictive brand or website name.
- Look for templates. There are free document templates online, including on The Prince’s Trust website. It’s useful to include financial appendices, again based on generic documents. These templates prove that you don’t need a marketing degree to explain a concept, identify opportunities or summarise year-by-year goals.
- Don’t overdo the content. A five-page plan is fine as long as it covers the three key elements – costings, market analysis and an overview of how the company will function. Knowing your target audience is important, but a concise summary of their demographics and buying habits will suffice in the plan.
- Follow the formula. A typical business plan starts with a one-page summary, leading into a detailed description of the business’s USPs and goals. After covering market demographics and competitor analysis, you should incorporate business development plans. Conclude with marketing strategies and financial projections.
- Focus on USPs. There’s no point launching a business that mimics established rivals: your new company should differ in service, choice or value. Look for niches that aren’t being filled, or customer needs not being met. Outline these USPs in your plan so potential investors understand why the company is being created.
- Proof and proof again. A business plan is often the only document people can judge you (and your proposed enterprise) on. If the financial projections don’t add up, or the text is full of spelling errors, people will quietly walk away. Spell-check the document more than once, and ensure it’s neatly presented in jargon-free English.
- Run it past friends and family. It’s often difficult to explain a concept or inspiration in writing. Show trusted friends and relatives your draft plan, asking whether it outlines your ideas clearly and convincingly. Act on constructive criticism, since your eventual audience may refuse funding or support for relatively minor reasons.
A well-written business plan often helps to refine proposals for a new company, steering it in a more profitable direction. If you only create one document before registering a business at Companies House, make it this one…