There are various reasons to start a business, from increasing your earning power, to taking control of your career. If you want to achieve these goals, however, you need to ensure your company charts a successful course, which will require you to compose a sound business plan. We want to help you get your firm started on the right foot, so here is Turner Little’s comprehensive guide to business plans.
What is a Business Plan?
A business plan is a document where you outline your vision for your enterprise and how you plan to realise these ambitions. You will need this document to acquire launch funding, one of the key considerations for new ventures, as investors will want to see that their money will be safe with you. You can also use it to map out the day-to-day running of your firm, ensuring a smooth launch by supplying details on resources allocation, as well as how you will prepare for problems in advance.
Primary elements
There is no such thing as a standard business plan, as each company is different. There are some elements, however, that are included in most documents. This includes information on the products and services you hope to supply to consumers, your target market, competitors and hiring strategy. It should also include key financial details, such as sales and cash flow forecasts, as well as annual profit and loss projections, to illustrate to investors how they can make strong returns on their capital.
Spotlight on finances
The financial element is critical, as only sound figures will persuade investors to take a chance on your start-up. It’s important to note that cash flow and profits are not interchangeable. Your firm may turn a profit, but this might not mean you have enough cash on hand to foot your bills. You may not be able to pay staff wages, for example, if your money is tied up elsewhere. This has sunk many lucrative businesses before, so it’s vital that you include strong cash flow management tools in your plan.
Executive summary
You should place equal importance on your business plan’s ‘executive summary.’ This is a small paragraph at the beginning of your business plan, which shows readers what they can expect to find in the document. Time-pressed investors will often skim the executive summary, to assess whether it is worth going to the effort of reading the full document, so it needs to really hook their attention.
Management responsibilities
Investors will also want to see that your firm will be led by a strong team, who can facilitate growth and drive revenue. It is wise, therefore, to provide an overview of your industry experience and qualifications, as well as those of any managers you have already recruited. You should also outline your management team’s responsibilities in detail throughout your business plan. This should include information on their objectives, deadlines and budgets, providing a comprehensive overview.
Plan length
This may lead you to ask, “how long should my business plan be?” There is no standard length, but you should follow one rule of thumb. The easier the information in your plan is to comprehend, the more likely investors will be to warm to your vision and part with cash. It is better, for example, to construct a 20 page business plan, where the information is broken up by charts, images and bullet points, than a 10 page, text-heavy document, as the latter will be harder for investors to read.
Writing plans
Keep one thing at the front of your mind, when writing your business plan. Its key points should stand out, so they catch the eye of potential investors. It is also important to ensure the document reads well and is presented appropriately, casting your firm in a professional light to interested investors. As you are a small company, it will fall to you to implement the business plan, so it should be simple, specific, realistic and comprehensive, allowing you to turn the firm into a success as easily as possible.
Business model
There is one factor, however, that we would advise you to consider before working on your business plan. You should choose the appropriate business model for your venture, as this could impact highly on your fortunes later down the line. It can be good to form a limited company, as this lends a greater measure of protection to your personal finances, should your firm encounter monetary difficulties, than you would have as a sole trader. Turner Little is a company registration agent, so by taking advantage of our limited company creation services, you can get your venture off to a solid start!
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.
