Series: Business plans – Part I: Why do you need one for your startup?November 15, 2020
Series: Business plans – Part III: Pros and cons of creating a business planNovember 23, 2020
Welcome to our latest entrepreneurial series. This one covers business plans, with tips and advice on the best way to get your company moving with a solid outline in front of you. In this instalment, we’re going to look at how to design an effective plan.
And if you missed it, you can still read our first instalment in this series on why startups need business plans.
Okay, let’s dive in:
- Do the background work: Before you put pen to paper, or start typing, it’s all about research. Gather as much information as possible about every aspect of your business. Of course, you’ll do more focused research throughout the writing process, but this initial burst will help get you started.
- Executive summary: This is simply the overview of your company and the plans that you have for it. It’s always near the start of your plan and you should aim to keep it short and succinct. Use it to communicate what your company is, and why it’s viable.
- Company description: Here is your chance to go deeper than the executive summary – so you can add detailed information about your company and how it solves customer problems. You can also look at why it’s competitive, what key advantages it boasts, and its overall strengths.
- Market analysis: You have already touched on how your offering solves a problem, but here is where you can go into more depth about what you’re selling, who you’re targeting, and what competition you will face. This is the place for your marketing plan as well as how you intend to measure success.
- Your offering: This is a deep dive into what you sell or what service you offer. This will have already been mentioned in the previous points, but here you can get into product lifecycles, any patents you have or are applying for, and what research and development you are undertaking.
- Management: Here you detail your team as it currently stands, and your plans for growing the team in the future. You can also give details of your legal structure. This section is a big selling point to potential investors, so ensure you emphasise all management/team strengths.
- Financial plan: This needs to be a solid forecast that will include balance sheet, sales, cash flow, and more. You should map out all anticipated setup costs, detailing the upfront expenses to get you started and the monthly costs for Y1 and Y2 (product development / COGS, HR, marketing, and other general operational). In terms of revenue projections you’ll want to work on thorough sales assumptions that can be justified and explained in a simple manner – preferably as a revenue matrix presenting different scenarios. Finally, create a cash flow statement – including initial investment required – to see what sort of financing (if any) will be needed.
- Appendix: And finally, here is where you can put other details, images or explanations that would have cluttered the main body of the plan. Ensure it’s easy to reference for the reader.
This wraps up our second business plan series. Next time we’ll look at the pros and cons of creating business plans.
And if you missed any of our our previous business series mailers, you can catch up anytime by visiting our blog here