The Planning Factor

PRE START-UP BUSINESS

WHAT’S THE POINT OF A BUSINESS PLAN?

If you’re new to business the thought of preparing and writing a business plan can be daunting.  My advice is to take it slowly and one step at a time.  Often big projects become achievable if you reduce them to their separate elements and tackle each in turn.  By creating a plan for your business you will have examined and answered key questions on the viability of your venture, and most importantly prove this to yourself and your supporters.  Not only that you will have produced evidence  that your concept will stand scrutiny  to yourself,  to  bank managers and other potential investors including any friend and family that could make a contribution to start-up costs.

The strength and likely success will be supported by:

  • A description of your vision and its future potential
  • Your research to see what other products or services are already operating successfully in the marketplace or obvious gap for a new product
  • A calculation the demand for your product or service
  • Supplying costings and sales projections
  • Explaining how you intend to manage the business

These elements fall into four categories:

  • The Human Factor – The originality of your idea
  • The Marketing Factor – How you intend to gain sales and present the concept
  • The Financial Factor – The viability of the idea with sales and breakeven projections
  • The Planning Factor – How the business will take shape, the timescale to launch and future growth potential.

After you’ve worked through these categories with all their supporting evidence the question remains to how to pull all the strands together.  This is a structure you could adopt:

  1. Front Page: Chosen business name, date, address and the name of the people/bank you have prepared your plan for.
  2. Management Summary: brief description of business proposition, key personnel, objectives and financial projection, start-up and short term operating costs
  3. Business/Sales Strategy: Routes to market, growth forecast
  4. Marketing Strategy : launch plan and promotional plan
  5. Management Structure: roles of key personnel
  6. Detail of Financial forecast – income & expenditure, capital requirements
  7. Supporting Appendices.

So to answer the question of: What’s the point of a business plan – the answer is:

  1. To create a benchmark for progress – and be prepared to change and update
  2. To lay down a blueprint to be tested before ‘going live’
  3. To demonstrate the validity of your concept
  4. To underscore your commitment and show what capital you’re prepared to contribute