How to Write Business Plans
A Simple, Free Guide to Creating and Writing Your Own Business Plan
Nov 4, 2008
Too many small business launches are based on no more than an idea for a service or product and a few financial projections….and too many small businesses fail in their first year. Often the causes of business failure could have been identified and prevented by a sound business plan.
Producing a good business plan is an essential key to business success. It will not only help you sell your business idea to a bank or other financial backers, but will also clear your own mind on what you are trying to achieve, how you are going to do it, and what resources you need - and identify potential problem areas which could threaten your business success.
Information Needed for a Business Plan
To develop a sound business plan, you’ll need reliable information on a whole range of subjects, including:
- The business sector in which you plan to operate.
- The size of the market and balance of supply and demand.
- Existing or potential competitors, their products, prices, strengths and weaknesses.
- Your potential customers or clients: who they are, where they are, what they want and what they’re prepared to pay.
- What advertising media will best reach your potential customers.
- Your proposed business location: accessibility for customers, working environment, transport, communication and storage facilities, and security as appropriate.
- The availability of materials, equipment, suppliers, staff etc.
- The impact of legislation on employment, health and safety, freedom of information, taxation, etc.
- Start up and operating costs, including:
- Capital costs for premises, vehicles and equipment.
- Materials and supplies.
- Labour.
- Heating and lighting.
- Transport and distribution.
- Communications IT and telephones.
- Insurance and security.
- Marketing and advertising.
- Loan interest and bank charges.
- Legal and accounting fees.
- Tax liabilities, including, as appropriate, Corporation and Business Tax, Income Tax, National Insurance, VAT and Business Rates
To base your plan on hunches and guesswork is a sure recipe for business failure. Researching your plan thoroughly is vital to make sure that your plan is based on reliable information. It’s all out there, it’s just a matter of finding it using a combination of:
- Central and local government offices and publications.
- Trade Associations and Journals.
- Competitors’ results and publicity.
- The Internet. The most fertile and easily accessible source, but always check the reliability of the site.
- Local Libraries.
- Newspaper Archives.
- Direct Market Research. Nothing can beat a consumer survey or questionnaire conducted with your actual potential customers. And you don’t need to pay an expensive firm of experts to carry it out; a simple self help survey will quickly and easily give you the answers you need.
Completing Your Business Plan
Having gathered all this information, you’re well on the way to producing a sound plan, and a successful business.
All that remains is to organise your information to describe clearly:
- The product or service on which your business is to be based.
- The business environment in which you‘ll operate, the nature of the market and the competition, and what makes your product special - its "unique selling point".
- How you will acquire or produce the product, or provide the service.
- How you will market the product or service.
- The anticipated demand for your product over time.
- Financial projections including cash flow, turnover, profit and capital required.
Business Plan Template
Download this free business plan template; it can help to create and present your own business plan in a clear, logical form.
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