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LMB BLOG BUSINESS ADVICE, TIPS AND SUPPORT

Tips and Advice to Prepare a Strong Business Plan

Part One - Advice Before You Start Writing Your Business Plan

Writing a business plan for your startup is an integral step in the running of your company. The plan is similar to a road map for your business journey. You will map out crucial details such as set up costs, ongoing costs, the potential risks and a whole lot more. It is this foresight which will help you to anticipate what may occur and how you will respond. The business plan needs to set goals in a structured manner.

You need to follow a consistent approach meeting targets and setting new ones. Also, a well formulated business plan is more likely to help you get funding and loans for your business because banks and investors need to see that you have a sound and methodical approach.

Clear Sections in your Business Plan

The Business Plan should be organised coherently and clearly into sections. These sections should show the priority and order of actions to take and how you will implement the actions. The sections you should include include things such as finance and costs, marketing strategy, The Four Ps: product, place, promotion, pricing etc. We will go into more detail about this in part two.

Implementation of your Action Plan

The Business Plan needs to have exact goals with the responsibilities and roles outlined if you have more than one person in your business. Also, you need to set deadlines for certain tasks to be completed by:

GOAL, ROLE, DEADLINE, STATUS

Here are some examples:

GOAL: Set up social media accounts for Facebook, Instagram and Twitter

ROLE: Sarah, MD

DEADLINE: by March 2022.

STATUS: In progress

GOAL: Find a local accountant who specialises in e-commerce

ROLE: Tom, Marketing Assistant

DEADLINE: by February 20th, 2022.

STATUS: Done

GOAL: Book into a course on making videos to market your business

ROLE: Sarah, MD

DEADLINE: by April 5th, 2022.

STATUS: In progress

Prioritising the tasks is essential to allow thea business to grow in a step by step manner while mitigating the risks involved. A sound business plan anticipates unexpected costs and events that could negatively impact your business. In this way, your business is able to survive challenges and obstacles.

Reviews

A Business Plan should not be static. You should review it and update your goals and actions. Each week, month and year see if you have met the goals you set for yourself and the business and then set new goals for the quarter ahead. During your reviews you can set both short and longer term goals.

Sales and Marketing Strategy for your Business Plan

Writing a business plan is not only about securing loans and investment. It is also about getting clear about what your sales and marketing strategy will look like. Digital Marketing is vital for nearly all businesses in the 21st century and therefore you need consider how to use Social Media, Paid Advertising, Blogging, Networking etc.

A clear and coherent sales and marketing plan helps you understand your selling points and how you will market your products/services and brand to the public and/or B2B.

Tailor the Plan to Your Target Audience

The plan should be tailored towards investors and also potential customers. There needs to be definitive facts about your products, services and overall goals. The plan is not just for your benefit and your staff, but at the same time it will help you in your daily, weekly and monthly decision making.

You need to make the obstacles you will face and the solutions to them crystal clear to your audience. You also need to be frank about the competition that you face and how you will overcome this to gain a share of the market.

Workout your Profit and Cost Per Unit

It is core to the survival of your business that you understand how much profit you are making on each unit that you sell. It may be that you only breakeven or even make a loss in the first 6 months. However, it is vital to know what level of spending you will need to make money and at what point the loss leads to a profit.

In this way, you can scale your business by determining how many units you need to sell to reach profitability. You need to understand how much your overhead and raw materials costs are and whether you can maintain a healthy financial situation.

Short-term Goals and Your Background

A business plan for a startup will tend to have lots of short-term goals for the first year. As stated before, they set out the stages a new business takes. You should also list your abilities and background and how they will support the business. Equally important is to identify your weaknesses and areas for improvement or where you are unskilled.

It is fine to include a long term vision but you need to show credible plans for the short term first for an investor to take your proposition seriously.

Comprehensive Financial Data

It is vital that you disclose all the financial data so that investors have an accurate picture of your business. Holding back financial data or trying to exaggerate or mislead investors, banks etc is sure to lead to your proposition for funding, loans or investment being firmly rejected.

Think Big Long Term

Though the Business Plan should mainly focus on the first year, long term goals can also be included. Everyone has to start at the beginning but that doesn't mean that your business has to stay small forever. Right from the start you can have a vision of how big you want your business to grow. If you think big in the longerm, then you can set up and design your systems and processes to accommodate growth and expansion in the future.

Be Open to Ideas

This is really important especially if it is your first time writing a business plan. Seek advice from other business owners and professionals to give you feedback on your business plan and proposals. Then edit and tweak your plan accordingly incorporating the best of their ideas. However, don’t let their caution or lack of vision stop you from setting objectives which you know you can and will achieve. Finding a mentor who is greatly experienced in your industry is a brilliant idea to help you along the way.

Be Agile to Change

Life is full of change, so keep your ear to the ground and be ready to change your products and services and the way you do business to ensure survival and growth. Agile Marketing is part of the digital age. Always closely watch your competitors and notice the trends that are popular and successful and get in on the action.

Change is the norm in business. Don’t get left behind even if it means moving into areas of business you are unfamiliar with. Innovation is the key to survival.

Don’t Stand Still! Best of Luck!

Part Two: Tips For A Start-Up Business Plan

What should you include in your Business Plan?

Business plans tend to be fairly similar, but the most important difference is to write your business plan tailored to the audience who will be reading it. This is normally investors, banks or other parties who are looking to either invest or lend your company money.

A business plan should consist of:

An Executive Summary
A Business Description
Details about your Sales & Marketing Strategy (including The Four Ps: product, place, promotion, pricing).
Competitor Analysis
A Design and Development Plan for your Products and Services
An Operations and Management Plan
Financial information, Planning & factors

The Financial section should also have:

An income statement
A cash flow forecast or statement
A balance sheet

The financial information should be accurate and show the real value of your company as well as your liquidity and profitability.

Write a Bespoke Business Plan for the Target Audience

Think about who will look at the business plan and what information they will require i.e. investors, banks, potential business partners, loan or grant organisations etc. Then write the business plan bespoke to what they require. This will achieve optimum effect.

In Depth Research of your Market

Investors want specific information about your market and the potential threats and opportunities. The proof is in the details. If your information is vague and woolly you won’t get investors on board. A casing point is to look at the BBC TV show Dragons Dens and see how the investors on there are very focused on details i.e. costs, profits, revenue, future sales forecasts, potential for expansion.

Action Point - Google and check out these links for:

Both will help your business plan look more professional. Include SWOT Analysis at the very least.

Who is the Competition? Exploit their Weaknesses and Emulate their Success

This is very important for you as an owner because information about competitors who are doing well should be used to emulate their successes. Emulate, but rip off their ideas. There is an important difference. Also, if you are able to spot their weaknesses and strengths and how much of the market they control, you will be better able to analyze ways to penetrate the market and be a player in the sector.

Capitalise on what they do badly and emulate what they do well. E.g. If their customer service is poor, make sure your customer service is excellent and highlighted in your marketing plan.

If a competitor is running popular 1 minute daily videos on Instagram giving useful information to prospective customers, then do the same thing but with your own spin and content. Don’t copy, emulate!

Check the Details

As well as including everything relevant to your target market audience, you also need to demonstrate your professionalism in the way the plan is structured and written.

It is important to check and correct costing calculation errors or any other mathematical errors. Also, look out for spelling and grammar mistakes because this could reflect badly on your brand. Financial facts must be accurate and you could employ help e.g. an accountant, to manage this.

Finally, be clear that your forecasts and predictions are based in reality with solid figures to back up what you write. If you write completely unrealistic targets and goals, you will destroy your business credibility.

Opportunities for Investors

You should focus on what opportunities your new business gives to investors. They need reasons to invest and see that their money will grow. This could include any paperwork for any new deals with other businesses to supply them with your products or services that you have lined up. Or it could be a massive endorsement from an influential person that will affect sales, or the winning of a licence or contract with a major international company and so forth.

Whatever information you have to show the potential growth of your business needs to be there on the business plan. It needs to be spelt out clearly to investors, so that they see there is an opportunity to get a return on their money.

Start with a Strong Executive Summary

This is the most essential part of your business plan. It should be impactful and compelling. The proposals and forecasts need to be realistic and not too far fetched. The best idea is to write the Executive Summary after you have finished all other sections as it is a summary of everything else.

Review By a Consultant

If this is your first time writing a Business Plan or if you don’t feel confident, then pay for an accountant or Business Advisor to review your plan. They will identify any weaknesses or gaps in your proposals. Also, ask your friends or contacts within your business network to review it.

Summary

A sound business plan is vital to the long term development and longevity of your business. Don’t be put off by the typical chatter about most businesses failing in their first year. That doesn't need to be you if you have a comprehensive and well-thought out plan of action.

Don’t forget that a Business Plan is not static. You should review and update it. Also, it is a measuring tool for the performance of your business matched to your goals and objectives.

A successful Business Plan will keep you on the right track to success and mitigate risks and uncertainties.

Good luck! Get out there and shine!

Jamieson Lee Hill

READING LIST: BUSINESS PLANNING

This is a list of quality articles to help you expand your ideas before writing a business plan.