How to Form a Business Plan

Your business plan will become the guideline to each stage of your business, helping you to structure and grow a new business. They can help you with funding, providing investors with the information they need to feel confident that they will see a return on their investment.

By writing a business plan, you will be able to:

• Set out your goals
• Clarify your business idea
• Spot potential problems
• Measure your progress

What is a business plan?

A business plan describes your business and the products or services you plan to provide. It covers who your customers will be, explains your business strategy and helps plan with marketing plans, growth, and competitor details.

Business plan formats

Not all business plans are suitable for all businesses, you must find the format that works for what you are trying to achieve.

Common Business Plans:

Traditional

The most common type of business plan, these usually take longer to write and can be several pages long.

Lean

This is a short version of the traditional plan which follows the same format but focuses on the most important information.

Non-profit

A business plan for non-profits covers the same information as a traditional plan but includes a section detailing the social impact of the business.

Executive summary

Your business plan should start with an executive summary outlining what your company is and why your idea will be successful. Include your mission statement, what your product or service is, information about your location, staff members and who will be involved in running the company. If you are looking for investment, it’s a good idea to introduce some financial details here also.

Company description

This part of your business plan should elaborate on some details from your executive summary, covering any additional details about your products or services. Are there any problems that your business helps to solve? What is your unique selling point? What does your company have over your competitors that will ensure your success? Discuss your strengths, but you can also discuss risks here, this gives your investors reassurance that you are aware of potential issues.

Market analysis

This part of your business plan is essential to letting investors know about your potential customers. Who are you targeting with your products? Find out about that group from published data and use that information to plan your next steps.

SWOT analysis

A SWOT analysis considers your strengths, weaknesses, opportunities, and threats. Where does your business excel? Where do you struggle? Is there any room for new opportunities? Where do the risks to your business lie?

Competitive analysis

Knowing your competition gives you the upper hand when starting your business. Find out what they are charging for similar products or services and offer yours at a cheaper price. Find out where your business differentiates from your competition and use that as a tool to market yourself.

Marketing & sales

This section of your business plan should cover your plans to attract and keep your customer base. How will you promote your products and services? How will you manage your sales?

Company Structure

Use this section of your business plan to provide an overview of your current team and who you will need to hire. Also provide your legal structure, location, and history if they apply. What are the key experiences of your team? What is your business structure? How will the ownership of the business be divided?

Provide a logistics and operations plan

This section is essential to your business if you require a warehouse or distribution channel for your products. Where are your products being produced? Do you have to deal with suppliers for your raw materials or finished products? How long will it take to produce your products? Can your manufacturing process manage an influx of orders during a busy period? How will your staff work? Do you need a physical location and where will it be? What equipment do you need to get your business running? Will you be shipping products or using a third-party? How much inventory will you keep to hand? Where will your inventory be stored? How will you manage stock?

This section should show that you understand your supply chain with contingency plans. It should help you make other important decisions, like how to price your products to cover costs, and when you will break even.

Financial projections

If you require investment a financial projection can be the difference between a yes or no. If your business is established, include statements and cash flow as well as inventory and other collateral.  Provide a projection for the next five years, break it down as much as possible.

Appendix

An appendix is useful as a place to include charts, legal notes, deals with suppliers or customers, and any other information that you haven’t yet included.

Take a look at our start up guides for more useful information for getting your business off the ground or give us a call on 0800 0198 698.