How to - write a strong business plan

Hey all. If you watched my YouTube video titled 'starting a business - where I'm at so far' then you will have heard me mention how strong of a business plan I had, and as promised I am going to share my tips and advice on getting your business plan just right...

You may be wanting to start a business from the comfort of your own home; baking cakes, cutting hair etc. and you may be able to fund your business from personal savings. If this is the case then I would suggest writing a business plan anyway. The reason I say this is because putting together a business plan forces you to break down what on the surface may seem like a simple idea, into quite complex segments. From my personal experience my original idea to what I produced after completing my business plan were quite different. This is because there were so many things I hadn't taken into consideration, some elements of my plan were impractical, some required too much funding... Had I been in a position where I could have started a business through my own money, I highly doubt I would have written a business plan and I defiantly would have found myself in a very horrible position six months from now. 'if you fail to plan, you plan to fail.'

I am lucky enough to have strong writing skills, which was defiantly a bonus when putting together a convincing plan, however this isn't a best selling novel we are trying to produce! So if you're not the next Shakespeare no need to worry. The only thing the person reading your plan cares about is whether or not your business has potential. So lets get started.

There are two routes you can take when writing your business plan. You can either do what I will call the 'business plan for dummies' pitch. This is where you explain exactly what you're doing in so much detail that the person reading it need ask no questions, everything is crystal clear. Or you can do what my business adviser calls 'the elevator' pitch. This is where you keep everything short, sharp and simple. The pitch you decide depends on who is reading your plan. If you are going through a bank or building society, they will usually offer you a template business plan. Make sure you check out their template before beginning your plan, this will give you an idea of what kind of plan they deem appropriate. If however you are going through a charity or organisation, they tend to prefer the elevator pitch, this is because unlike a bank these organisations are there to help you and not make money off you. So along with funding they will usually offer support, business advisers, workshops and events, all to assist you in setting up your business. Originally I wrote a 'business plan for dummies' pitch. After reading and re-reading, it just felt better to go with an elevator pitch. My business adviser later told me that the elevator pitch was defiantly the right decision because sometimes, too much information is not a good thing. However I will say that dummies pitch most defiantly taught me a lot more about my potential business.

The Elevator pitch

This business plan is short, sharp and simple. 

• Tell the reader what your idea is
• Who your target audience is
• What the outcome of setting up this business will be

Any questions that need answering in this style of business plan require direct answers. 

What prices will you charge for your services?

Good example: The average price I will charge for a cup cake is £2. 

This is direct and clear. 'the average' suggests not all pricing will be the same which is all the reader needs to know. Any more information is unnecessary. Remember a business plan is really just a guesstimate of what you think will become of the company so it is impossible to be accurate and your reader understands that. Also the person reading your business plan does this for a living, they may have 15 other business plans to read that day so the shorter the answer the better. 

Bad example: The average price I will charge for a cupcake is £2. The prices will change depending on the style of cupcake. A simple cupcake with just plain icing will cost £2, however if I have a jam filling in a cupcake I will then charge £2.50. Any cupcakes that are decorated (with sprinkles for example) I plan to charge £3.  

The person reading this is not trying to buy your product / service. This is too much information and not needed. All the reader needs to know is the average because again this is all guess work.

Below is the same template I used for my final business plan. Please feel free to use this as it done extremely well for me. Some extras I added to my plan included tables to demonstrate cash-flow and my customer profile. I felt it made more sense and was easier to read that information in the form of a table as appose to paragraphs. Use this template as exactly that, a template. Adjust it as you seem appropriate. 

Business Plan

Business Name:    

Owner Name:

Age & Date of Birth:

Business Address:

Postcode:

Telephone – Business:

Website Address:

Telephone – Home:

Email address:

Home Address if different from above:

Postcode:

Date submitted:

Whom submitted to:    1.

                                   2.

                                   3.

1.  MY BUSINESS - OPERATIONAL ISSUES

·       A description of the services or products I will be providing

·       How the Business will operate

Sole Trader:                            Limited Company: Partnership: Other:

·       Where I will operate the Business from (Home or Premises?)

·       Business Targets (Objectives)

Short term objectives: Medium term objectives: Long term objectives:

·       The Things I must do to make my business successful

To be successful, I must:

2.  MARKETING

·       A description of my customers

The main customer base will be:

·       Market research conducted and findings

·       My competitors

The types of businesses who are my competitors are: Name three competitors with their strengths & weaknesses:

·       How my business will stand out from my competitors

·       How I plan to promote/advertise my business

I plan to promote my business through the following mediums

3.     PRICING AND SALES

·       The average price I will charge for my services or products

·       The prices I will have to pay to others in order

    to provide my services or products

·       Average number of products or jobs I expect to sell/do each

day/week/month

4.  THE EQUIPMENT AND TRANSPORT

     I NEED TO START MY BUSINESS

What I will contribute	Value (£)	What I need	Cost (£)
Total		Total

Why the above equipment is needed?

5.  THE RISKS TO MY BUSINESS AND  

      HOW I WILL OVERCOME THEM

6.  THE FINANCE I HAVE APPLIED FOR

Funder	Amount applied for	Offered

The 'business plan for dummies' pitch 

The template above can be used for this pitch,  the only difference is of course the way you answer each section. Answers need to be very well executed. The reader wants as much detail as possible, this plan requires paragraphs, tables, bullet points and first and secondary research as evidence on any points raised.

Name your main three competitors, how does your company differ from them?

Bad example: My main competitors are, Lola's cupcakes, Yummy Slice and Gregg's. These companies cupcakes are not as decorative as mine will be. In many ways I plan for my company to stand out as a luxury brand, including having a well-executed and interactive website.

Although this answer does go into some detail it is still too vague for this kind of pitch. Someone reading this may still be left with questions. All your answers in this style of plan need to be detailed and answered in the most appropriate way. For this type of question, a paragraph is not the best way to give a clear answer.

Good example:

By using a table format and breaking each element down into sections you are giving the reader a clear and precise answer. Leaving little room for any confusion. As mentioned earlier; originally I wrote a business plan in this style. It was a lot of hard work to complete but brought to my attention things that I probably wouldn't have noticed had I only done the elevator business plan. The template I used for this more complex business plan was by Barclay's, which you can find online. Click this link for Barclay's business plan template. 

Whatever style of business plan you choose to go for, make sure you are telling the reader, who you are, what you plan to do and how much money you can make. The internet, as we all know is full of an abundance of information. If ever you are stuck and need further advice, Google is your best friend. Lastly I will say, never underestimate the importance of a good business plan. This is the foundation of what your business may become and you want to get it right. Good luck writing and congratulations on taking your first step into entrepreneurship.