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What is a Business Plan?

A business plan is basically a blue print to success. It sets out the parameters of how the business will operate, who the key players are, the plan going forward and any other relevant information that the author deems necessary should be included.

Why do I need a Business Plan?

You need a Business Plan for a number of reasons. First and foremost it is will focus your mind on where you are going or where you intend to go. It will dictate the speed of growth and will also allow your staff and other members of your team to share the vision.

Secondly, a Business Plan will be required if you intend to raise finance. If you intend obtaining a Business Loan or finance through other funding streams then again you will need a Business Plan. One thing is for certain, it is imperative that you construct a plan and amend/update it regularly.

Does the Business Plan change?

Yes it does. As your Business grows and changes, so should your Business Plan. It is wrong to assume that a Business Plan, once created, is filed away in a draw for 12 months. It should be kept in an easily accessible place and be update on a regular basis - for this reason alone it will focus your mind on where you are going.

What should the Business Plan contain?

This will depend on your own requirements but let's take a look at some basic components:

SECTION 1 - Principle Business Details and Activities.

1. NAME OF BUSINESS

The name of your Business goes here.

2. BUSINESS ADDRESS

Company address goes here.

3. BUSINESS TELEPHONE CONTACTS

Your business telephone contacts go here.

4. DATE BUSINESS COMMENCED

This is the date that your business started or was registered with Companies house.

5. LEGAL STATUS

Whether you are a sole trader or a Limited company.

6. PRINCIPAL ACTIVITIES

Describe your main business activities. For example:

The development and creation of jewellery which is then sold via the internet worldwide.

SECTION 2 - Your key Business Objectives

SHORT TERM BUSINESS OBJECTIVES

Here you should include your short term vision. An example of this would be as follows:

To develop a sustainable business through the development of excellent products and customer service. We aim to develop 30 products within the first 12 months of trading, and achieve a turnover of £50,000.

MEDIUM TERM BUSINESS OBJECTIVES

A medium term business objective should be 3 to 5 years maximum. Include here where you want to be by this time and how you plan to get there. For example:

We aim to have created 100 products by 2008. The majority of these will be created by staff that will be employed as a result of the short term aim achievement.

Our turnover by this date will be £250,000 with a profit margin of 35%. Our sales will be predominantly achieved through internet advertising although we expect during this period to trial other methods such as National newspaper advertising.

LONG TERM BUSINESS OBJECTIVE

The long term business aim should be your ultimate goal. This can be any length of time from 5 years to 15 years. An example of this would be:

To have 50 different retail outlets strategically placed around the UK in areas of high demand. The company aims to exceed an annual turnover of £2,000,000 with a profit margin of 35%. The company will still continue to trade via the internet and it is expected that this will account for 40% of our business.

SECTION 3 - Key personnel

NAME AND POSITION

Insert name and position. Example:

Richard McMunn – Business Development Director

DOB

Insert date of birth

STATUS

Business Development Director and shareholder.

EXPERIENCE AND KNOWLEDGE OF THE INDUSTRY

Insert any experience and knowledge of the industry.

PREVIOUS EMPLOYMENT

Insert previous employment here.

QUALIFICATIONS

Insert qualifications here.

NAME

Repeat the above for all key personnel.

SECTION 4 - Premise details

In this section, indicate where the business is registered and where the business operates out of.

SECTION 5 - Equipment

Include all equipment that is owned by the company. Examples of these would be:

- Computers including software and hardware
- Vehicles
- Manufacturing equipment etc

SECTION 6 - Products and services

Indicate here what services and products are offered by the company.

SECTION 7 - Advertising

Here, include details of how the company advertises its products. This may either be in the form of internet advertising (Google, Yahoo or otherwise), Newspaper advertising (either National or local), other media avenues such as Admedia or any other form of advertising.

SECTION 8 - New products and services

Include here all of your predicted new products and services that will go on sale within the next 12 months.

SECTION 9 - Pricing

- How do you price your products?
- What is the profit margin of each product?

Include a breakdown of how much each product is on sale for and how much that product costs to produce.

SECTION 10 - Customers

What is your target audience and how do you know this? (i.e. ages 16 – 30). How to you reach your customers? How many visits does your website get each week?

SECTION 11 - Business strengths

Include here all of your business strengths.

SECTION 12 - Areas for Improvement

Here, include all of the areas you believe you can improve on. A business that has no areas to improve on is not telling the truth!

Be honest and look critically for ways in which you can improve or develop.

SECTION 13 - Business competition

Who are your major competitors? How do you monitor your performance against theirs? What are they doing that's different or better than you?

SECTION 14 - Market predictions

How do you predict your market and adapt to the changing conditions? For example, during Christmas time sales may increase depending on the type of product you are selling or the service you provide. January through to April maybe slow in terms of sales due to the fact that people are less likely to spend after the expensive Christmas period.

Think about your business and how the market will vary from month to month. It is essential that you begin to track your daily sales/turnover right from the word go. After a year or two of trading, you will be able to predict your sales and adapt accordingly.

SECTION 15 - Sales and Promotions

What are your predicted sales and the reason why?
Are you planning on running any promotions throughout the year?

SECTION 16 - Financial Information

How long have you been trading and what is your monthly/annual turnover?

How much have you spent on starting up your business? How did you finance this initial investment?

What is your predicted turnover for the next 12 months and why?

SECTION 17 - Business asset statement

What are the financial assets of the business including stock.
 

To move onto the next section of the Business Start Up Course, entitled 'How to Register a Business', please click here.
 

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