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Introduction
It is essential to have a realistic, working business plan when you're starting up a
business.
A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts. It has many functions, from securing external funding to measuring success within your business.
This guide will show you how to prepare a high-quality plan using a number of easy-to-follow steps.
The audience for your business plan
Many people think of a business plan as a document used to secure external
funding. This is important because potential investors, including banks, may
invest in your idea, work with you or lend you money as a result of the strength of
your plan.
There are many other benefits to creating and managing a realistic business plan
- even if you just use it in-house. It can:
• help you spot potential pitfalls before they happen
• structure the financial side of your business efficiently
• focus your development efforts
• work as a measure of your success
The following people or institutions may request to see your business plan at
some stage:
• banks
• external investors - whether this is a friend, a venture capitalist firm or a
business angel
• grant providers
• anyone interested in buying your business
• potential partners
You should also bear in mind that a business plan is a living document that will
need updating and changing as your business grows. Regardless of whether you
intend to use your plan internally, or as a document for external people, it should
still take an objective and honest look at your business. Failing to do this could
mean that you and others have unrealistic expectations of what can be achieved
and when.
What the plan should include
Your business plan is a statement of intent. It should provide details of how you
are going to develop your business, when you are going to do it, who's going to
play a part and how you will manage the money.
Clarity on these issues is particularly important if you're looking for finance or
investment. The process of building your plan will also focus your mind on how
your new business will need to operate to give it the best chance of success.
Your plan should include:
• An executive summary - this is an overview of the business you want to
start. It's vital. Many lenders and investors make judgments about your
business based on this section of the plan alone.
A short description of the business opportunity - who you are, what
you plan to sell or offer, why and to whom.
Your marketing and sales strategy - why you think people will buy what
you want to sell and how you plan to sell to them.
Your management team and personnel - your credentials and the
people you plan to recruit to work with you.
Your operations - your premises, production facilities, your management
information systems and IT.
• Financial forecasts - this section translates everything you have said in
the previous sections into numbers.
Looking for a free business plan example?
visit Bplans and get 500+ Sample Business Plans.
