A Business Plan should be the 'Bible' of your business, if you are starting out it should be where you jot every idea, this document will show you your business journey, the errors in which you need to resolve. It is also to show other people (that don't know you or the business) what the purpose(s) of the business is. There are many templates out there that you can use for guidance. Here are the main areas of a business plan.
It is always good to start a business plan explaining about yourself (a lot of finance providers are also thinking this way too). Let's face it, there will always be at least one person running the business and making the decisions, so understanding this is very important, right? So, explain your background/experience if you have any. Why you have a passion to start this business? What is your motive to starting a business? This could be because you want some flexibility with your time, be financially stable or just because you have a passion for what you do.
This section is more exciting, the reason you've even had to think about a business plan. This part is to explain what your business is and what your it will be doing (primarily). The main thing to include in this section are: What are the services or products you will be selling? Try to make this as clear as possible and don't try to over complicate things. If you have a product or service that is new to the market, explain it simply without too much technical jargon. More questions about the business will be:
- Where do you see the business in 3-5 years time?
- How will the business be staffed?
- Are there any legal requirements to start your business?
- Is a premise needed? Or can the business be on a mobile basis?
This section will be the most important part of your business. Your market is what brings in the money, keeps the business going. This section is to understand who your customers will be, how you are going to target them and how your business will impact competition. Key questions in this section may be:
- Who is your core target audience?
- What are their demographics?
- Where are they currently buying this product/ service?
- What are your USPs?
- How do you differentiate yourselves from the rest of the market?
You may already have clients that you can start your business from, if not, you may understand who you can target. Another key aspect to consider, how you are going to promote your business.
This is to understand how you will advertise your products/ services. Dependent on where your business is going to be based and the market it serves, you may need to look at local, regional and/ or national advertising. This could be traditional offline methods or online.
Other important factors to consider:
Who are your competitors? And how might they affect your business?
So, this is to understand whether you have done your market research which will tell you who your key competitors are. 9 times out of 10, if you are starting a business that has been done before you will have competitors in your area. They may not necessarily have a reaction to you opening but it's always good to prepare yourself in case they do and know how you will respond to them.
This is to understand whether you know your profit margin (what the product/service will cost you as a business and how much you will be selling them at). Not only that, but to understand how many sales you will need to do a month to keep the business going and pay your personal bills (if you are taking a wage from the beginning). This would be a good time to write an expenses list; what bills you will have a month from the business and from yourself. In essence, it will give you a good idea how to price your products/services and how many you will need to do.
As I said in the beginning of this post, I think writing a business plan of some sort is very beneficial to starting up, as it will make you think about different areas of business that you may or may not have thought about and will help you construct a viable business.