How to write a business plan for start-up success
Knowing how to write a business plan is key when starting out in business. A business plan will e the roadmap for the company and lays out the important factors of business success, from funding to sales and marketing. However, research suggests than just one in four start-ups bother writing a business plan. There is some debate on whether businesses that have a plan are more successful than those who started out without one. Whatever camp you’re in, if you require funding, a business plan is a must.
Lack of knowledge on how to write a business plan is probably the main reason for so few businesses having a plan, so we’ve laid out a simple-to-follow-guide covering the basics.
Create a summary overview – even if your business plan is just for yourself at the outset rather than to gain investment or funding, lay out the strategy, objectives and how you plan to achieve them just as you would if you were presenting the plan to a third party. It will force you to think about USPs and realistic goals. The strategy and objectives may change as the business evolves, but having the original plan in mind will help you make the right changes for the right reasons, and prioritise short and long term goals. Think carefully about timelines for goals. Also include factors such as what resource you will need to achieve these goals, and a plan for recruitment and retention, as loss of a key staff member can be detrimental to business operations. Business premises and equipment will also be a key consideration and will have a significant impact on start-up costs.
Be realistic – positivity and ambition are great traits to have when starting out in business, but over-optimistic forecasts and hyperbole could lead to a crisis. Whether investing your own cash or someone else’s in a new business, it’s important to base the business plan on what is realistically achievable, based on some sound knowledge and research. Assess the risks with as much consideration as you would use for opportunities – as planning for all scenarios is crucial in business. It is usually useful to create a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis.
Know your market – entering into business is challenging enough, without going into it blind. It’s amazing how many businesses start out with what they believe is a great idea, without really researching whether it’s a highly competitive market, or a high demand product or service. With the internet and the availability of affordable DIY market research tools, there’s no excuse not to thoroughly check out the competition, market and conduct some research among the target audience. This kind of insight can provide invaluable information that will help you achieve business success by being forearmed. It can also help you differentiate your business from competitors based on what customers actually want, and will form the basis of your marketing efforts.
The F-word – finance is often key to any business, whether at the start or to facilitate growth later on. Consider when funding might be needed, and have a plan for how to approach it at the time. With a variety of funding options now available, the bank doesn’t have to be the first port of call for lending. Alternative lending sources are aplenty – from private equity or ‘business angel’ investors to crowdfunding – so it’s worth thinking about the right lending source for your business needs. It’s always best to seek advice on this at the time, to ensure the funding source you choose is right for your business goals.
This guide will help with writing a business plan but for a complex business idea or structure, consider getting professional help with planning, as time and money invested in getting it right at the outset can reap the rewards in business later on.
For more information or help on how to write a business plan, call us on 01827 54944.