Writing Your Business Plan

Writing a business plan is a very useful exercise to clarify your thinking and put down in one place all the things that you have thought about whilst reading this book, ready to start your business.

A business plan should contain the following headings; an executive summary; a description of the business; descriptions of the service or product; the market place you are entering; a marketing plan; your operations and lastly but very importantly financial information.When you read a business plan it will always start with what is called an executive summary. This is just what it says, a summary of the entire business plan. It is used as a quick tool by other people reading your business plan to get a rapid overview of the main points of what it contains. Some business plans can be many pages long and in this case it is particularly useful to have a summary of all the main points included in the longer plan.If you are thinking of going to the bank for a loan or trying to raise money from investors whether they be friends or other people this is where the executive summary becomes a useful necessity. However, even if you are not intending to show your plan to anyone else Writing the summary is also useful as it can fix the business plan in your head. The executive summary, although it is always at the front of a business plan is written last, after the plan is complete.The first section of the actual plan, where you should start are the details of your business; its name, address, telephone number, website and email address and its legal status. If you are working on a lifestyle business then you will more than likely decide to operate as a sole trader, however you could become a partnership if there are two of you or you could decide to set up a limited company.The legal status of your business is something that you need to think about. What is the best option for you and for the business? Operating as a sole trader is easier from both an accounting and tax perspective, but it does mean that all the liabilities of the company are yours. Setting up a company, is an easy process and it means that any liabilities are with the company and not with the individual. However having a limited company does bring with it more demands for returns to the Inland Revenue and to Companies House, with fines if you miss deadlines. If you are intending to use the services of an accountant being a limited company usually costs more in accountant's bills than operating as a sole trader. If you are going into partnership with someone it is essential to draw up some agreement between you at the beginning.The next section of a business plan describes your service or product, including its features and any unique selling points it has; that is the things that make it different from the products or services of your competitors? Include in this section any statutory requirements that you will have to meet for example if you are cooking from your home kitchen you will have to have it inspected and passed by someone from the environment health department. It should also have information about the research that you have done on any competitors who are offering the same or similar product or service and the conclusions that you have drawn from this.Next is information about the market you are intending to reach. This should include information about any market research you have undertaken, either informally or formally and the resulting conclusions you have made from this in regards to your product or service. This is in terms of the need for and interest in, your product or service. Who will be your potential customers and how you will get your product or service to them.Your marketing plan should be included in your business plan, as the next section, covering the areas already described earlier in the book.Then write a description about the operation of your business. Where will it be based? Is it going to be on your kitchen table, in your garage, in a spare room in your house, in a shop, or in a lock up unit and what equipment will you need in order to carry out your business. This should to be in as much detail as possible.Then write a description about the operation of your business. Where will it be based? Is it going to be on your kitchen table, in your garage, in a spare room in your house, in a shop, or in a lock up unit and what equipment will you need in order to carry out your business. This should to be in as much detail as possible.You should also include a financial forecast of how many sales you will make each month for the first year and how much income that this will achieve, taking into account any seasonal differences and identifying your outgoings each month in order to achieve these sales. These will be your fixed costs and your variable costs for each month, identified separately and then added together and then taken away from your projected sales figures to give you your pre-tax profit.It is also necessary to explain the assumptions you have made in deciding upon these figures even if the business plan is only going to be for your eyes. If it is for wider reading then it is imperative that you explain these assumptions or it could look like you have just pulled the figures out of thin air.When you have written your business plan you will have all the information you need about how you are going to start and develop your business. This is very useful documents and something you should revisit once a month in the first six months to see if you are on track with your predictions and to adapt it if things have taken a slight turn in another direction. Business plans are dynamic documents that should not be filed away but should be kept as a constant companion especially in the early days of setting up your business.