What should be in your business plan?Published on 2021-11-24
Having a thorough business plan is something all business owners need to do, especially those who are in the early years of their business. The process of developing your plan helps you understand the type of business you’d like to build and the action plan which you will need to follow.
There are a few things that are essential to any business plan and there are things that are appropriate for your venture. If you are starting a business, you should make sure that you think about all the equipment and technology you will need, such as a wheelchair lift, and in this article, we will take you through some ideas as to what should be in your business plan.
What is a business plan?
Essentially, it is a document that tells the story of what you are planning to do and how you are planning to do it. The Gov.uk website describes what a business plan is: “A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.”
What should be in your business plan?
Your business plan focuses your mind on how your new business idea will need to work to enable it to succeed and there are some generally accepted elements that it should include. Your plan should cover all the important matters and below are some of the things you should consider including in your business plan.
Your basic business idea
Obviously, a key element of your business plan should be the actual idea of your business. This is where you discuss the industry and how your idea fits into it, the structure of your business, the actual product or service you are offering and what you are going to do to try and make your business a success.
When coming up with a business idea, The Entrepreneur Handbook shares some tips to consider: “It is important to understand why you are starting a business so you can focus on business ideas that will help you get to where you want to go.
“While it is possible to create a successful business solely to make a lot of money, in reality, it will be hard work if there isn’t at least one other factor acting as a motivator. This is because it can take many years between starting a business and receiving any money from it – if ever – and along the way the hard work required is immense, and the possibility of failure is very real.”
Another key part of any business plan is to come up with a strategy and what you intend to do to implement it. You need to think about what goals you want your business to achieve and how you are going to reach them as well as a rough timeline as to when you hope to achieve your business goals.
What are you going to sell?
Businesses can sell two things – either products or services. Products are objects like jewellery and books, whilst services sell time to do something for a customer such as a plumber or a car mechanic. A business can do both.
Within your business plan, you need to talk about your products or services and why people will buy what you are offering and not from competitors. In this part of your business plan, you need to realise that anyone reading it might not be familiar with your product or service and therefore you need to explain everything, despite how obvious it might seem.
Another essential element of any business plan is to lay out a marketing plan. You will need to highlight who your customers will be, the demographic of your audiences and how you intend to capture your audiences.
The Princes Trust talk about the importance of knowing your audience and market: “A big part of knowing whether your business will be successful is understanding your audience. Make sure your plan is clear about your target market – who will you be selling to and how many other companies are already selling similar products?”
The likelihood is that your target audience is likely to be using other businesses, so it is vital that within your business plan you show that you have researched these rival businesses and your potential customers. Instead of just researching the entire global market, it is more beneficial to research your local market in the area you are planning to run your business. This should give you some idea as to what your market looks like and what customers expect.
Operations and logistics of your business
You also need to consider the operations and logistics of your business and how it will work on a day-to-day basis.
There are lots of things to consider for this part of your business plan as you need to work through the different stages of how your business will work, from making or buying the product you are selling to delivering it and taking the money.
You need to answer questions such as how long will it take to make the product or if you are buying the product, how long will delivery take? How much will transport cost and how long will it take to be delivered to the customer?
There are other considerations you need to discuss such as the equipment you will need to use to make the product or store it as you may need a goods lift for your stock and other types of equipment. You need to consider how much this equipment will cost and whether you will be running the business on your own or if you need management and staff?
You also need to discuss where you will run your business from and if you plan to rent premises, you need to consider the cost of it. You also need to consider insurance and what type your business will need and consider any laws that apply to your business.
You also need to think about the cost of your product and work out whether your customers pay upfront or pay a deposit and the rest once the service has been finished. It is important to work out how much the product you are making or the service you are offering costs you and how much the delivery will cost so you can then work out what to charge your customer.
Making financial forecasts for your business
This is where you forecast how many sales you are aiming to make in your first year and how much money you are hoping to make. Generally, it is best to plan for the worst-case and for most businesses, sales are affected by factors out of your control such as the weather, holidays etc.
This is essentially a model of how your ideas about the company, its markets and its strategies will play out.
This article looks at what should be in your business plan and what things you need to consider when creating one, from the equipment you might need like a platform lift to market research. For more articles like this, check out our blog.