You will need to have a plan when setting up a business. It might sound slightly obvious, but many directors often get unstuck because they didn’t spend enough time thinking about how they were going to run their operation. Putting pen to paper can help you to clarify your thoughts and often help you to expand your ideas to help your business to grow even further.

Even if you are a one-man-band, it is important to ensure you know your costs and work out what your cashflow is going to be like. If you need a bank account, your bank manager will probably need to see a plan before he will accept your application.

Besides which, if you don’t have a plan, how well you know whether things are going well or not?

The Plan

- State your aims and objectives. Set out what you hope to achieve and over what sort of timescale. You may want to split this into several sections and have objectives for the first three months, six months etc. Set yourself a financial target – make sure you are realistic!

- Why have you set the business up? Describe why the business was set up. Did you spot a gap in the market? Or did you feel that you could do better than the other offerings already out? Have you got something unique to your business?

- Sales & Marketing: What are you going to do to get your product/service out there? How will you market your product? What sort of take-up rate do you expect? How will your customers find out about you? How are you going to advertise the product and what will your costs be for this?

- Finance: What sort of money are you expecting in? What sort of wage will you be taking? How is the business to be funded? (personal cash? loans? investors?). When will the business become profitable?

The business plan must be comprehensive. If you are self funding, the document is more of a reference document to ensure you stick to path that you set out on. If you are relying on the bank or other investors, the plan must include financial forecasts so the investors will know when they can expect a return on their money.

Business Plan Stucture

1. Summary – the mission statement, objectives and aims of the company.
2. Company Outline – the history, structure and who you are and a brief history of how you got here.
3. Products/Services – what the company will be offering, what current competition there is, future plans for the product/service and product development plans.
4. Market Analysis – what the market is doing currently – what it needs, what the trends are, who the major players are, and how your company fits into the current market.
5. Strategy – this is your sales & marketing plan. How you intend to get customers and keep them, how you will stay ‘current’.
6. Management – Who’s who in the company, how the company is structured and who is repsonsible for what.
7. Finances – funding (how much and where from), assumptions you are making about your money, projected sales, turnover and profit, cash flow and your balance sheet.

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