A business plan is a way of demonstrating that you understand the opportunities for the business, you have worked out how it will generate income and make sales, and you are realistic about plans to run and develop it.
It’s NOT a test of your computer skills or creativity! So – beyond ensuring that it’s organised in a way that makes it easy for others to read and understand, and there are no spelling errors (what does it say about attention to detail if you haven’t used spellcheck!) – the content is much more important than the design.
If you search online for a business plan there are no shortages of templates and guides: the Business Gateway plan is a good startpoint. You may find there are small differences from template to template, but they should all cover the main aspects that banks, investors or business advisors expect to see. We’ve outlined them below.
Your business and objectives
What is the business, what will it offer? What are the core products/services customers will buy?
Your skills and experience
What is your working background and what skills have you developed that you can use in the new business? Don’t forget that even time spent away from work (for example, maternity leave or caring responsibilities) mean you have developed relevant skills – such as organisational, time management and planning.
Your target customers
What would a typical customer of your business ‘look like’? Sometimes these are called customer personas. It really helps to spend time thinking about what needs and motivations would drive a customer to want to buy from your business.
Your market and competition
Market research is vital to provide evidence that there is enough of a need, or clear competitive advantage for the services or products your business will offer, to make your business viable. In order to generate income you must be clear what makes your business different from the competition – why will customers purchase products or services from you, and not elsewhere? This is fundamental to the chances of your business succeeding and will contribute to justifying the level of sales you expect to make – the projections you have in your business plan. You can do a lot of market research yourself online. If you can refer to relevant reports and surveys these may also boost your case – useful places to start are the Business & Intellectual Property Centre at the Mitchell Library, Glasgow, or Scottish Enterprise’s market research team is particularly useful if you want to explore international opportunities.
Your marketing and sales plans
This explains how your target customers will find out about what your business offers and how and where they can buy from you. Will you have stalls at markets and fairs? A website with a built-in sales function? A shop? How will you use social media to build awareness of your business and what social channels do your potential customers use? Will you build awareness through local or industry networking? When do you expect to start making sales and how will that grow over time? The details here will feed into your financial projections and so it’s vital that your projected sales levels are well researched and realistic.
Your operational plans
This outlines what you will need to run your business and the costs involved. It will include materials, running costs such as IT and computing, stationery, heating and lighting (or the cost of your desk space or office) for wherever you work. Don’t forget even if you work at home, you will have some costs directly related to the space where you are working. If you plan to have staff (and that includes you!) what will their functions and role be in the business and what will they cost?
Financial projections provide a summary of business income and costs, tying together the details in your market and competition assessment, your sales and marketing plan and your operational plan. In this way, you can stress test your planning assumptions are robust, identify anything that may require revisiting and re-planning, and ensure that your business will be viable.
If you can show you have considered the risks of setting up your business then you can show you are more prepared to put in place measures right from the start to minimise things becoming a problem. The good news is that research shows that women are really risk-aware, so better placed to give useful thought to this part. What could go wrong and if it does, what steps can you build in from day one to make sure it’s a problem, not a crisis. For example what if your computer is stolen or just ‘fries’ one day? Things like secure logins or having all your business files backed up to a Cloud-based storage solution will show you can get your business back up and running quickly without loss of sales.
What else do you think your supporters and investors would need to know, to have confidence in your business and how you plan to run it? You might have testimonials from customers you’ve worked with doing the same thing, before you started this business. You might already have commitments to order products. Still keeping your content concise and to the point, think about what else you need to include to present your business in the most compelling way.
As you research and shape your business idea, see a business plan as a tool to help with your thinking. For more inspiration read what bankers are looking for in a business plan. A Business Model Canvas isn’t the same as a formal business plan, but it does help focus your thinking and can be helpful at key stages of developing your business – learn how to develop one on here. You might also be interested in the 6 Ms Model.