Key Components for Writing a Business Plan When Starting in Business
The two activities which gave me the best preparation possible for the launch of Busy Lives! were attending a three-day course on starting your own business and writing a business plan. I knew exactly what my services were going to be, but I had not considered the entire big picture and everything else that was needed. Writing my business plan gave me not only an insight as to what was required but clarity and understanding of what my business would achieve within a competitive marketplace.
Writing a business plan enables you to have a robust strategy for moving forward. If you are in the process of starting your own business or at a stage in your business where you require a business plan, I hope the contents of this blog post give you a good starting point.
- Why do you need a business plan?
- When should you make a business plan?
- Key components of a business plan
- Final Top Tips
- How Busy Lives! can support you with this
Why do you need a business plan?
Whatever your business, a business plan is essential. It will allow you to strategically break down all the necessary elements involved in running a business and allow you to see if your business will succeed. It is also a crucial document to have if you are applying for a grant or a loan.
An effective business plan will outline your business structure and future goals. This can also help secure potential lenders and business partners. Having a strong business plan can show potential lenders what to expect from your business and help them decide if your business is worth investing in.
As well as drawing in outsiders, your business plan is a tool you can use to create a blueprint of what your business is going to achieve. This is especially helpful when you are starting out.
When should you make a business plan?
It is advisable to create your business plan before leaving your current career. A well-thought out business plan can help you make sure you are really ready.
Update your plan regularly, to ensure your business continues to grow and this is a ‘living document.’ – I update mine every 6 or 12 months.
Key components of a business plan
Below are key parts of a business plan. Not every business will require every section. Take the time to read through and decide if you need this. And remember, you can always add and remove sections as your business grows and changes.
Depending on your business, your business plan can take many forms, for example a small one-person business plan may focus on personal goals for development, target customers and finances.
Use this to provide key snap shot information about your business.
- Your brand logo
- Contact name
- Business name
- Post code
- Business idea
- Start date
- Business structure
- Last updated
Table of contents
- A table of contents is a useful guide for the reader. It shows the different parts of the business plan which can be quickly referenced by page number and demonstrates your thought process in compiling it logically.
- This section should be at the start of your business and plan. The executive summary outlines what your business is going to accomplish.
- This section can also include your business’ mission statement and what services / products your business is going to provide.
- If you are applying for funding / finance this is the place to detail what you want. In general, you should keep this section to half a page but no more than a full page.
- If your business is already established this section can detail what you have already achieved and how you are planning to move forward.
- You should consider at your executive summary as your ‘elevator pitch’. It needs to be short and to the point.
- Write your executive summary after you have written the rest of your plan. Your executive summary should be a condensed form of your business plan so writing it last can make sure you have included all the important points.
- This is where you write your business description. Include key information such as your business’ goals and what makes your business stand out from the crowd. (Once you are established, you can include your business’ history).
- One of the most important things to include in your business description is your mission statement. A mission statement should be short and clearly display your unique selling point. For example: if your business focuses on environmental issues make sure your mission statement incorporates this.
- Your business goals should be SMART (Specific, Measurable, Achievable, Related Targets). Vague goals can negatively impact on your direction moving forward and profits.
- When writing your business’ history do not record everything. Stick to major milestones and basic information.
Management and organisation
- This section is for you to outline your business’ chain of command. This can be a diagram or a list detailing high-profile people / outsourced business and their skills / job responsibilities.
- This is also the place to state whether your business is a limited company, sole-trader, or partnership.
- Detailing the skills and experience of important people in your business can entice investors. A business with lots of skilled and experience people is less of an investment risk.
When setting up a business you must ensure you adhere to all legalities such as:
- Making sure you have the required insurance, permits, licences or registrations.
- You adhere to H&S guidelines and practices.
- Your business complies with current GDPR regulations (data protection).
Breakdown of products and services
- Detail your business’ products and services stating how these will meet an existing or future need in the marketplace.
- As well as pointing out the features of your products / services ensure you state how these features benefit your customers.
- This is your opportunity to showcase your knowledge of your industry. Use statistics and dates to prove your points and state where your business will sit in this industry. This also be the place to detail the demographics of the customers you market to. Include your sale forecasts and market strategy.
- Use your research to detail why your business is going to be profitable. For example: online searches for the product / service your business provides have increased by X % over the last X months.
- When deciding your target customers aim to be as specific as you can. Your marketing should be pitched as if you are talking directly to them.
- Your marketing plan should detail the steps you are going to take to promote your business. You can also include your planned budget for this. There are several things you should include in this section including:
- Detail what current strategies you have in place and where you intend to get most of your business from. For example: word of mouth referrals. From this you can detail how you are going to move forwards and increase your sales either by implementing new marketing plans or building on existing ones.
- A market analysis is where you conduct research into your business’ market. This includes discovering who your potential customers are and what their shopping habits are. How much your customers are willing to pay for something and how large your target market is.
- This is a strategy where you either serve customers in a particular area only or where your customers will have different preferences based on their geographical location.
- If geographical segmentation is applicable to your business then here is the place to document this and group your customers based on location; this can be done by region, city or neighbourhood.
Demographical and Behavioural Segmentation
- Demographical segmentation is where you divide your customers based on their demographics. This can include age, gender, income, location, education and ethnicity.
- For example, a budget gardening business may choose to focus on customers with lower incomes.
- Behavioural segmentation requires you to know more about your customers habits including their spending habits and brand interactions.
- For example a budget car business may decide to focus on customers who have purchased a second-hand car in the past five years.
- This is really key to not only know who your competitors are but ensure you pitch your pricing accurately. Here you need to compare your business to those that already exist. Map out your competitor’s strengths and weakness and how their business differs.
- Reflect how you can benefit from their weaknesses to make a success of yours.
- This is a really important section to spend time on. Break down the different aspects of your business and you running it. Doing this will help you to identify where you need to professionally develop or outsource parts of your business to in the future.
- Whenever you identify a weakness you need to find a solution.
- Lastly, when you have mapped this out. Prioritise which identified weaknesses and threats need to be tackled in the short or long term.
- Use your competitor analysis with what they are charging on average as a starting point.
- Pricing is an important element and will have a direct impact on your business. When pricing your products / services it is important to cover all your costs – this includes materials, labour, property, marketing, networking, distribution costs and a monthly salary.
- Don’t forget to factor in Tax and National Insurance.
- Check your pricing against the number of hours you intend to work each week across a whole year. Is it still financially viable? You may find you need to adjust what you charge in light of this.
- If you are trying to get funding it is a good idea to include a funding section which plainly states how much money you are looking for and how you are going to use it. If you are going to need more money later, state that too.
- If you do not have an exact number in mind provide a range. For example: £2,000.00 -£3,000.00
- It a good idea to include a timeline showing investors what they can expect from your business.
- Make sure your funding request is realistic.
- Demonstrate ‘Best Value’ where you can obtaining three quotes on equipment and resources.
- Low investments with high returns are more desirable than high investments with low returns.
- This is the place to plan out your business’ financial goals and your expectations based on your research. State your estimated revenue for the upcoming year.
- This is also the place to make a budget. For new businesses you need to research your estimated costs and how you will budget for them. If you are unsure of a cost always budget more to make sure you are not left short.
- It is also vital for you to consider and include your own living costs. As a business owner your monthly income is not guaranteed, especially when you are starting out. This is something you will need to factor in and budget for before starting your new business venture.
- For a new business, you will need to do a personal balance sheet and a projection of your business’ balance sheet. When making these make sure you remain realistic and work both best-case and worst-case scenarios. Remember to consider your living expenses and ensure you have budgeted for this.
- Have two financial figures. A realistic one for what you need to earn as a minimum to meet your expenditure including your cost of living. The second one is your financial goal that you aim to achieve.
- When writing your income and cash flow statements your first year should be broken down to monthly segments, your second year can be quarterly and thereafter it can be yearly.
Appendix of official documents
- One final thing you may require is an appendix of related documents. This can include permits, certificates and legal documents as well as industry memberships and identification numbers.
Final top tips
- Less is more. Keep your business plan to the point.
- Make it easy to read. Investors receive countless business plans. If it is hard to read, they will not read it.
- Make it professional. Ensure you proofread the document and lay it out in a clear and professional, consistently formatted manner.
Not every business will require everything detailed above. Use what you find useful and tailor you plan to suit your needs.
When you do revisit your plan, you will most likely find that you have achieved some goals and so sections of your plan are no longer relevant. This is a good thing and shows your business has progressed. It also means it is time for you to set new goals. However, you may also find you have not achieved some goals. If this is the case then sit down and find out why you have not reached this goal, adjust it if needed and plan is needed to be put in place for it to succeed.
How Busy Lives! can support you with this
Busy Lives! was created when I left a busy career that left me time poor and unable to give sufficient priority to what really mattered to me. I now provide a wide range of business support for people in that position or are wanting to start their own business.
I am happy to help by:
- Discussing the content with needed for writing a business plan for your business.
- Working alongside you to help you write your business plan.
- Listening to your ideas and content then typing your business plan for you.
- Formatting your business plan so that it looks of a high professional standard.
- Researching your competitors for the competitor analysis section of your business plan.
- Sharing the business plan template that I use.
Find out more about my Business Support Services
Let you help you gain precious time back. Ring Busy Lives! 07565 722 031
Drop me a message on this website, LinkedIn or Messenger on Facebook
Or Email: firstname.lastname@example.org