e-skills UK Guide: Creating a business plan
The first hurdle to starting a business
Creating a business plan is one of the first hurdles for any new and aspiring business person. This guide will show you what resources are available to help. By creating a plan you will be able to save money as well as make money as you use your resources more effectively.
Business plans also have a part to play in existing businesses that are wishing to develop and grow with additional funding. A business plan will often form the basis on which banks, venture capitalists and business angels will invest. By having a compelling business plan your investors will be easier to attract and will have a greater respect for your business acumen.
Even a very small sole trader should have some form of business plan as it acts as a focal point for building a business.
Business plans – why bother?
If you are reading the Business IT Guide you probably have an interest in starting a business or maybe already have one up and running. If you are new to business you no doubt have lots of reasons and motivations to want to create your own company and are probably very excited about being your own boss.
Most business people would agree that running your own business is fun, as well as stressful and tiring, but few would want to give it up and go back to employment. But before anything happens for real you need to sit down and plan precisely what you want to achieve from your business. By doing this you get a chance to explore some of the more difficult issues such as finance which often stall a business before it has had a chance to take off.
Luckily there are some tools that can help you create a business plan.
What is in a business plan
It is important to understand the basics of a business plan before rushing out and buying something to help you create one. A typical business plan has the following breakdown:
Business Description
What is the business called and what is it actually going to sell? Avoid specialist language and put down in simple, straightforward terms what the business is about. Think long and hard about the business name – you could be stuck with it for a long time.
The Market
What other companies are there in a market and why are you different? How big is the market and what % of the market are you going after. Is there a market in existence for your product? Is it local or overseas? What’s the competition like? You may want to do a strengths/weaknesses/opportunities and threats analysis, commonly called a SWOT analysis, of the competition. Here are a couple of free SWOT software tools:
My Strategic Plan
Products
What are you actually selling and why? Why is your product better than anyone else’s? How are you going to produce your products?
Pricing
How much will you be selling the product for? Is the market price sensitive?
Promotion
What marketing activities do you need in support of your business objectives? You need to think about advertising, websites, mail shots, targeted email, leaflet drops and word of mouth to start with.
Profit and finances
What are your profit margins and how will you be funding the business? What cash flow projections do you have and how will you collect payments? Is factoring a possibility? How are you going to raise finance?
People
Who is involved in the business and what is their background and history? You may need to demonstrate a track record of success to attract external finance.
Infrastructure
How many employees do you need? Do you need premises or can you start the business from home? Do you need any expensive machinery or other equipment to produce your goods?
Of course we at the Business IT Guide can not give very specific guidance for your business but these points have covered most of the key issues financiers like to see.
Business Planning Software
There are a range of tools available to help you with business planning. There are some software products that you can install which then take you through the business planning process. Some of these come with pre-built templates and industry sector data that can help with your market research. They may also have some financial planning software to help you create a balance sheet and set financial milestones.
Always remember that you are creating your business plan, copying someone else’s is not going to do you any favours with potential financiers that see many business plans each day.
The following links to business planning software may be useful:
Business planning tools from banks
A lot of the banks give away business planning templates as part of their marketing to attract new business clients. These tools are also useful as they can help you format data in the correct way for the appropriate bank you are dealing with.
The following links may be useful:
Further information
For further information on this topic, why not take a look at this video:
What next?
If you’d like more information on ICT or suppliers in your area contact Business Link by:
emailing: enquiry@businesslinksw.co.uk
calling: 0845 600 9066
visiting: www.businesslinksw.co.uk
Alternatively, click here and complete a simple form to request a call back from a Business Link Adviser.
Commercial suppliers
We do not recommend specific products or suppliers; instead we provide you with a representative sample which covers the range of suppliers/products available. You may choose to look at these suppliers or products but this is entirely at your discretion.
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