Writing a business plan is an essential first step for anyone contemplating starting a business. A business plan will:
- Clarify your businesses’ potential for your own peace of mind
- Clarify your businesses’ potential for the peace of mind of any prospective lender or investor
You will need to satisfy yourself, and your lender or business investor, that your business idea is sound; and that it takes into account current market trends and demand for your product or service.
Your plan has to conclude that your business is imminently viable and profitable; if it doesn’t, then it’s probably a non-starter.
However, a badly thought through business plan may well mask a hidden gem of an opportunity. Follow these simple guidelines, write your plan and then get it checked out; Business Solutions will help!
Guidelines to writing an effective business plan
- Don’t waffle!
Sound enthusiastic by all means, but, from the outset, stick to the facts; explain to your investor exactly why your business will succeed. A short sharp paragraph will grab the attention of the reader, who, in truth, is skimming the text to get an overall feel for your idea.
Do not jargonise, or use intimidating terminology that most people would struggle to understand. Keep it simple, concise and specific.
- Demonstrate awareness of, and identify, your target audience
Once again, be specific, you are not writing a novel. Show that you’ve done your research; acknowledge your competition and describe, succinctly, how you plane to compete.
How will you market your business, how will you gain the edge?
Demonstrate your understanding of the market place, and detail how you intend to ‘sell’, with gusto, to the prospects on your doorstep, and to the millions of potential customers laid before your feet, courtesy of the internet.
Get a realistic grasp of where your target audience lies and the extent, and possible effects, of competition from other suppliers.
Show that you have done your research; be enthusiastic, be positive; if you don’t sound confident then it’ll be game over before it starts!
- Thoroughly scrutinise your financial requirements
A lot could be riding upon your accurate financial analysis, especially if you’re looking for a loan.
Present well researched facts as to all expected cost. Include overheads and all outgoing costs, such as rent, rates, electricity, insurance, wages, marketing, travel … in fact anything you can think of that will financially impinge upon your profits. Be thorough.
Furthermore, project your volume of sales, based upon your knowledge of what existing competitors are achieving.
Know your purchase costs, then calculate your desired resale profit margin. Is your product allowing you good profit? If so, is it competitively priced?
You won’t get financial backing unless your figures add up. And, to be honest, if the figures don’t project profit then it’s best to find out before plunging into debt.
A detailed breakdown of all costs could prove most revealing, both from your own, or a lender’s perspective.
A good business plan will clarify the viability of your business idea. Take your time in its preparation; think through all possible scenarios. Remember, it’s important to stay positive, enthusiastic but above all, realistic.