Matthew Riley, Founder & Chairman at Daisy Group, outlines some necessary inclusions when creating a business plan.
It’s all well and good having a great idea for a business, but in order to get the required personnel to buy into your dream, you need to have your plan down in writing. Creating a business plan will help organise all your ideas and show you and others the necessary steps you need to take in order to realise your dream.
Most owners only develop a business plan when they need to raise additional funding; however creating one right at the start of the business’ journey can help shape a profitable future. They are primarily strategic documents that give an indication of the ultimate business goal and how you are going to get there both operationally and financially.
A business plan is a road map, which helps you keep on track when exciting opportunities try to steer you down avenues which aren’t beneficial to your business.
So what do you need to include? Well, all businesses are unique but the following sections are a must!
The document is inevitably going to be pretty in-depth, featuring a plethora of figures and projections; nevertheless, it’s important to remember the basics. Start by including a page with contact information and general business details.
I cannot stress the importance of your executive summary to the overall business plan. It’s here where you have to succinctly explain – in just a few sentences – your vision, the essence of your business and its unique attributes that will help it appeal to customers, suppliers and investors.
Similar to a brand mission statement it needs to validate your concept; it’s here where you need to big your company up. Where are you at and how do you intend to progress? Always include financial projections and if it’s for investment purposes, include the amount you want to raise. Overall you need to make sure it’s engaging, conveys your personality and encourages the reader to carry on.
Now’s the time to go to town and explain what your company is. Imagine this is a profiling piece. Include details on date formed, location, any successes so far (if possible) and the staff you currently have who make the company tick, for example, this might be a good opportunity to mention you have a recruited an experienced partner. It may also be a section where you admit you need to recruit if you discover any gaps.
If you’re planning on setting up a business it’s vital that you analyse your likely competitors and the market you’ll be operating within. Is there a space in the market which you believe your business can exploit? Identify your competition’s weaknesses and explain in this section how your advantages will set you apart. Analysing market trends will also stand you in good stead in terms of creating strategies that either embrace them or navigate around them.
Equally important is building up a profile of your target audience. Although there is always going to be a slight bit of fiction around this section, you must try and identify the personality and demographic of the audience you are trying to sell your products or services in to. Doing the research will enable you to create processes that work to your desired consumer, improving overall business productivity.
A crucial facet of a business plan which often gets overlooked is describing how you’re going to market your business. You should have by now already highlighted your business’ benefits, so how are you going to convey them? Consider direct mail campaigns, PR opportunities, online strategies and advertising openings. It’s vitally important you include any branding ideas in this section too. Be as detailed as possible here of how you’re going to target prospective customers.
Operations and infrastructure
How do you see the day-to-day functioning of your business? What do you need in order to fulfil this vision? Think facilities, think communications technology and think transport and parking; will your staff need anything in order to fulfil their jobs? Also consider whether you will need investment and project the milestones you aim to hit along your growth path.
And finally, a financial plan
This is arguably the hardest part of the business plan; it’s kind of make-or-break time. Here you need to identify how you see your business actually making money; at the end of the day, that’s why we all work. Highlight any key financial metrics and make projections of how you see your finances developing – partly helped by your market and competitor research. This must be as in-depth as possible including cash flow, profits, losses and sales forecasts.
If you require funding, this is also the time to speak up.