Guide to Writing a Business Plan
Starting a small business: how to write a business plan
Being your own boss is an idea that is attractive to many, but starting up a business is something that requires very careful preparation and realistic expectations. The first thing to do is to take some time to read the multitude of advice that has previously been published on the subject. It will point out some useful success stories, outlining the factors that led to that success, as well as some common pitfalls.
Most of the experts agree that one of the first things you will need is a feasible business plan. Banks will normally want to see evidence of a business plan before allowing you to enjoy the advantages offered by a business bank account, so it is worthwhile taking some time to ensure it is comprehensive. In general it will need to outline the business objectives, and demonstrate an understanding of the marketplace, including the competition.
A typical business plan will be between 15 and 20 pages long, and will be broken into relevant sections. It needs to strike the right balance between being concise and detailed, and there are a number of different templates that can be used as a starting point. However, a business plan will usually evolve, sparking more ideas and raising as many questions as it answers. This will clarify the challenges moving forwards.
The considerations are numerous, but key questions to ask will be how much capital will be required to start up; how much control may need to be relinquished to venture capitalists in the form of stakes in the business; and when will the business start to make a profit. Any investors will also want to know when they will begin seeing a return on their investment, so a detailed financial section, including cash flow and yearly income projections, will be essential.
The other key consideration to include in a business plan is a picture of the current marketplace the business will be entering. This will give a sense of how much room is left for the product or service you are attempting to sell. The more competition in the field already, the less chance you have of being successful, and it is best to be realistic about this from the outset.
This section will therefore need to discuss what your market strategies will be along with an awareness demonstrated by a competitive analysis. Arrive at an estimate of your business's likely market share by thinking about your target group of consumers. Will you be joining a field where big players are already established, or are you looking to serve a niche segment? It is also necessary to consider how you will publicise the business to that target group and hopefully build up a loyal customer base.
Just under two thirds of the 500,000 new businesses that were started up in the UK in 1998 still survive, but a sound business plan is the first step on the path to success.