A Business Plan is an essential tool if you are thinking of running your own business for the first time or launching a new venture. You should think of your Business Plan as a feasibility study to determine whether the business should actually go ahead in the first place. After all, your bank would never lend you money without seeing a proper Business Plan, so you should be equally circumspect about spending your own money on a new venture without doing a lot of research first to make sure it is a viable proposition.
Preparing a Business Plan is a good discipline in itself because it makes you think about the aims and objectives of your business in a focused and methodical way. People tend naturally to enthuse about the potential of a new project and spend a lot of time thinking about how it might be a roaring success whilst glossing over the more mundane reasons why it might not
be. Often these are things which may seem like tedious detail at the time, or unknown quantities that one naturally hopes will work out for the best. Once you start putting all these factors down on paper (or on screen) it forces you to consider them properly for perhaps the first time and do some proper research on them.
A good Business Plan should start with an overview of the goods or services you will be selling, your business objectives and how you plan to achieve them. A description of the existing market should also be made along with your own unique selling point. You need to explain why you think there would be a demand for your goods or services, or why customers would choose you instead of the existing suppliers. You then need to provide details of all the resources you will need to make the business work. This includes technical knowledge of the product or service you will be selling, licenses, staff, equipment, premises, services and, most importantly of all, finance. You need to have some kind of idea as to how much all of this is going to cost and where the money will come from. Then you move on to how you will make the business work. This will include a description of your procurement arrangements, production methods, pricing policy, marketing strategy and distribution channels.
The second part of your Business Plan is the financial analysis and forecasting. This is the nuts and bolts of your plan and it is imperative that the figures stack up and are based on careful research rather than hopeful guessing. It is the part most likely to be focused on by anyone you have asked to provide funding, like your bank manager. Inevitably there will be assumptions and estimates, particularly on the sales side, but if you can back them up with reasoned arguments, you are far more likely to have your projections taken seriously.
At Acumen we can help you put together a Business Plan, identify the key variables and construct the financial models that are crucial to obtaining finance. Please give us a call if you would like any help with all this.