Are you embarking on a new business journey? Or reviewing a current venture?
Your very first step to business growth and success is writing a business plan.
Surprisingly, new research from Barclays stated that in the UK, only one out of four small businesses (23%) don’t have a business plan. Yet a business plan creates a 30% greater chance of growth.
A business plan is like a guide that tells you and others what you want to do with your business, how you will do it, and what you expect to happen. It helps you in many ways, such as:
● Ensuring your business idea makes total sense
● It gives you direction, focus and an actionable plan
● It points out possible problems and how to navigate them
● It helps to plan out and track your finances
● It persuades others to support your business
However, there is no need to write an epic novel!
A concise, punchy document should do the trick as long as your business plan includes these six essential elements:
Executive Summary (Your Elevator Pitch)
Your executive summary is like the elevator pitch of your business plan, providing a snapshot of your entire proposition in a concise and compelling manner. It should include:
Business Description: Begin with a concise description of your business, its mission, vision, and the problem it seeks to solve.
Your Objectives: Clearly outline the goals and objectives of your business. I always recommend creating a business plan with the end in mind first and moving backwards.
Your Ownership Structure: Detail the ownership of the business, including any co-owners and their stakes in the business.
Market Analysis (Your Detective Work)
A market analysis is like doing detective work to understand everything about where you want to sell your product or service, figuring out who will buy it, who you’re competing against, and how you fit in.
This helps you make the right choices in how to run your business, like picking what to sell, how to talk about it, and how much to charge. It includes:
Market Trends: Explore what’s happening in the market right now: how big it is, if it’s growing, and what things might get in the way. It’s like peeking into the business world, seeing what’s popular, and guessing what might be the next big thing or possible challenge.
Target Market Segmentation: Split your main customer group into smaller parts and determine the most important part. This helps you focus your efforts and resources where they will likely impact most.
Competitive Analysis: Analyse your competition, look at what they’re doing well and what they’re not doing so well, and see what you can learn from them. This helps you figure out how to do things better or differently in your business to attract customers and succeed.
Organisation and Management
A business plan’s Organisation and Management section dives into the people-power and structure of your business. It gives a peek into how your business is set up, detailing how it’s organised, who’s involved, what they do, and how they work together to keep everything running smoothly.
Essentially, it’s your chance to introduce the dream team and operational backbone that will bring your business to life, ensuring everything ticks along beautifully from day to day! It should include:
Your Business Structure: Define whether your business is a sole proprietorship, partnership, corporation, or LLC.
Your Team: Present the key members of your team, their roles, expertise, and contributions to the project.
Your Advisory Board: If applicable, describe any advisors or experts connected with the business.
Product or Service Line (Your Offering)
A business plan’s Product and Service Line section shines a spotlight on what your business offers customers.
It shares the details about the goods (products) or help (services) you plan to sell, diving into the nitty-gritty, like how they work, how they’re made, and how they’ll make life easier for your customers. It should include:
Product/Service Description: Provide detailed information about your product or service.
Unique Selling Proposition (USP): Highlight what makes your product/service stand out in the market.
Intellectual Property: This is about protecting your business ideas and creations. You must discuss patents, copyrights, or any intellectual property associated with your business.
Sales and Marketing (Your Game Plan)
The Sales and Marketing section of your business plan is like your game plan for attracting people to buy what you’re selling.
This part talks about how you plan to catch your customers’ eyes (marketing) and how you’ll get them to actually buy your stuff (sales).
It should include:
Pricing Strategy: Define how you will price your product/service and justify this strategy.
Sales & Marketing Plan: Outline how you’ll attract and retain customers. Be as specific as possible. What do you need to do to achieve your business goals? This part of your business plan is all about the action.
Financial Projections (The Money)
Financial Projections are your way of saying, “Here’s what we think our financial picture will look like down the road,” using data and estimates to paint a picture of your business’s money moves, from earning to spending, for the next few years!
This part gives everyone, from team members to investors, an insight into your business’s financial future, highlighting your predictions about sales, expenses, and profits.
It should include:
Profit and Loss Statement: Provide a projection for at least three years.
Cash Flow Forecast: Offer a monthly cash flow forecast for the first year.
Break-Even Analysis: Show when your business can cover all its expenses and begin to make a profit.
Funding Needs: Specify the amount of funding needed, its uses, and the type (debt or equity). Discuss any future funding rounds, the intended use of funds, and potential exit strategies for investors.
Building a business plan might seem like climbing a giant mountain, but dividing it into smaller, bite-sized pieces makes the journey much more manageable!
Don’t forget, your business plan evolves —it should grow and change just like your business does, adapting to new twists and turns on your adventure. Always test and measure what is working and adjust your plan accordingly.
One of the critical elements of a successful business plan is ensuring you have someone to hold you accountable for its implementation.
If you need extra accountability and direction with your business plan, book a FREE business planning session with me HERE.
