You’ve decided to setup a new business! You’re enthusiastic and excited but have no idea how to write a business plan or why you even need one. Keep reading to find out how to get started and to download our free business plan template.
Why do I need to write a business plan?
Your business plan will serve as a road map for your business. It will help you spot any problems, identify how you will make money and help you measure your progress. Here is a list of reasons why you should have a business plan:
- Help you clarify your business idea
- Spot any problems, weaknesses and/or threats to your business
- Help you identify your competitors and their strengths
- Plan your marketing and operations
- Workout any legal requirements you need to run your business
- Workout how much you need to invest to get your business started
- Convince other people to back your business. (You will need a business plan if you apply for any business loans with the bank).
How to write a business plan – step by step guide
You’re now ready to write your business plan. Make sure it includes the following key sections:
- A summary of your business. Think about the history of your business, how it started and ownership of the business.
- A business description. What do you sell? Describe any key benefits of your products or services. Avoid any technical jargon and explain it as clearly as you can.
- Your skills and experience. Write down any skills and experience you have relating to your business. If this business is new to you then think about any transferable skills you have. You might need to think about hiring staff to help with any skills you might lack which are essential to running your business – this will be included in your business plan later.
- Details of marketing strategies. Think about how you will sell your services or products. It’s a good idea to detail who your ideal customer is and how they will find you. From there think about your marketing budget and if any customers will be returning (or retained if you’re running a service).
- Competitor analysis. Who are your competitors? Describe their advantages and disadvantages compared to you (for example: price, location, quality). Write down why your customers will buy from you instead of them.
- SWOT analysis. Swot stands for “strengths, weaknesses, opportunities and threats. Although this crosses over into your competitor analysis, this can also include any industry specific niches. For example; weakness could be lack of finances or reliance on a few customers. When writing your SWOT analysis, make sure you are honest about your weaknesses and threats.
- Your operational plans. Write down what staff you’ll need to employ, how much it will cost to hire them and why you’re hiring them. Research premises you will need to rent or purchase in your plan and also any equipment. Don’t forget to include any legal costs related to setting up your business whether this is industry specific or otherwise.
- Financial information, planning and factors. Arguably the most important section of your business plan. Here you will need to detail how you’ll be funding your business and what revenue you expect to generate. Make sure you include what type of funding you’ll require. Under revenue, you can break this down into sales from different products or sales from different types of customers. Include a contingency plan and ‘what-if’ scenarios into this section.
When you write your business plan make sure you keep to the point, avoid waffle and jargon words. Have a friend who doesn’t work in your industry proofread for you to make sure it makes sense. Remember, your business plan may need to change as your business grows so be prepared to come back to it as and when you need to.
