Writing a Business Plan
A
business plan helps you to do all the necessary research to take a
business concept and lay out how it is likely to work out in practice.
It will be particularly important in order to help attract finance for
your business.
Financial projections are a particularly important part
of the plan and a large amount of detail will need to go into them
covering sales, margins, overheads and break-even analysis.
An overview of
the Business Plan
Potential lenders need to get an insight
into your current operation and future plans. For this to happen the
plan needs to be well organised and presented.
The amount of detail required will vary depending on the
situation but the plan should cover the planning of the business using
best estimates of future operations, the financing of the business and
how it is to be funded, how the plan is to be implemented and the method
of monitoring the progress of the business against the plan.
As well as being used by lenders a well thought out
business plan is actually an excellent management tool allowing you to
plan what is going to happen and deal with potential problems.
Contents of the Business Plan
The plan does not need to be too long, just enough to clearly give the
relevant information that a lender may need. Every last detail is not
required as you do not want to bore the reader and further information
can be requested if required.
The introduction is important as this will determine the
extent of interest the reader has in the rest of the plan. Many are
thrown out at this point! It is also important to sum up well at the
end.
The following can be used as an outline for the
arrangement of a business plan...
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Contents
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Introduction - this should be a good overview what
business does, is it established or new, the management team, the
competition, the marketplace, suppliers, financial projections and
history, investment required and long term plan.
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Background - of the company and the key
individuals.
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Management and Organisation - a management chart
and staff plan, salary policy, and outside expertise to be used such
as accountants and solicitors.
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Products or Services - what you sell.
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Operations - the production process, capacity,
quality control, plant and machinery needs, the premises required
and future needs.
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Markets and Marketing - the marketing plan with who
the customer base is, how you'll reach them and the competition.
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Financial Projections - cashflow projections,
profit forecasts and break even calculations. They should be
consistent with the rest of the plan and make sense. A detailed
monthly cashflow should be provided for at least the first 12 months
and in some cases up to 5 years. Worst case and best case scenarios
can be provided.
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