Your business plan will need to include most or all of the following sections.
Introduction Product or service details Personnel Market research and marketing plan Premises, equipment and transport Suppliers and sub-contractors Legal aspects Financial information Risk assessment Financial requirements Appendices.
Let's look at each of these in a little more detail.
Introduction
This is where you explain the nature of the business and its proposed structure (e.g. sole trader, partnership, limited company). It should be no longer than one or two paragraphs. If the plan has been written for a specific purpose - e.g. to support an application for a loan - this should also be mentioned here.
Product or Service Details
In this section you describe in some detail the product or service you will be providing. If it is a product, you should show clearly how it will be made, explaining all the stages involved. If instead you are providing a service, you need to explain precisely what this is and what type of customers you expect to require it.
Personnel
In this section you include information about the person or people who are behind the business and will be managing it. If you intend to be a sole trader, this will of course be yourself. In partnerships and limited companies, it will also include your partners or fellow directors.
You should describe briefly your past work experience, especially where this is obviously relevant to the new business. Include any educational or occupational qualifications, and any previous experience of running a business. You should also mention here any business-related training you are undertaking. If you are receiving active advice and support from a business development agency (for example), state this here also. Your overall aim is to demonstrate to a potential lender or backer that you, as the person behind the business, are well prepared for self-employment, and have the experience and training to make it a success.
Finally, in this section you should mention whether you intend to employ any staff. You should indicate how many you will need, what skills they will require, how much you expect to have to pay them, whether they will be full- or part-time, and what training they will need.
Market Research and Marketing Plan
This is a very important section which will normally take up at least a page of text, and in many cases more. Its purpose is to convince the reader that there will be enough demand for your product or service to make the business viable within the market in which you intend to operate.
This section should therefore summarise your market research, and in particular answer the following questions:
Who will be your customers, and what will be their requirements? How large will your potential market be? Who will be your competitors - their names, addresses and details? What are the main strengths of these competitors? What will be your advantages over them - or, to put this another way, why will people buy from you rather than them?
All your answers should be backed up with facts and figures from your market research. When you are describing die market size, for instance, you should explain clearly how you have arrived at this figure. Statements such as 'There is considerable demand for...' or 'Many people require...' are worthless without some market research data to back them up.
Also in this section you should describe your marketing plan. This concerns how you will advertise, promote and sell your product or service. It should answer the following questions:
How and where will you advertise your product or service? What other forms of promotion will you use (e.g. direct mail, exhibitions, telephone selling)? How will your product or service be sold (e.g. wholesale, retail or through agents)? What features and benefits will you emphasise when trying to attract customers?
Premises, Equipment and Transport
This section will state the premises to be used. If you will be working from an office in your home, or perhaps a converted garage or shed, this should be mentioned as well. Remember, the aim is to convince backers that working from home is a sensible option for your business and you have all the facilities and space required.
Similarly with equipment and transport, you should explain what you need, how it will be obtained - e.g. by leasing, hire purchase or outright payment - and whether it will be new or second-hand.
Suppliers and Sub-contractors
Many businesses rely on other businesses to supply them with raw materials, components or services. Any problems in obtaining these can result in disaster for the business, especially if it is a new one. In this section you should therefore explain who your main suppliers and subcontractors will be and why you have chosen them, stating alternatives where possible. You should also comment on any discussions you have already had with suppliers, agreements reached, credit facilities negotiated, and so on.
Introduction Product or service details Personnel Market research and marketing plan Premises, equipment and transport Suppliers and sub-contractors Legal aspects Financial information Risk assessment Financial requirements Appendices.
Let's look at each of these in a little more detail.
Introduction
This is where you explain the nature of the business and its proposed structure (e.g. sole trader, partnership, limited company). It should be no longer than one or two paragraphs. If the plan has been written for a specific purpose - e.g. to support an application for a loan - this should also be mentioned here.
Product or Service Details
In this section you describe in some detail the product or service you will be providing. If it is a product, you should show clearly how it will be made, explaining all the stages involved. If instead you are providing a service, you need to explain precisely what this is and what type of customers you expect to require it.
Personnel
In this section you include information about the person or people who are behind the business and will be managing it. If you intend to be a sole trader, this will of course be yourself. In partnerships and limited companies, it will also include your partners or fellow directors.
You should describe briefly your past work experience, especially where this is obviously relevant to the new business. Include any educational or occupational qualifications, and any previous experience of running a business. You should also mention here any business-related training you are undertaking. If you are receiving active advice and support from a business development agency (for example), state this here also. Your overall aim is to demonstrate to a potential lender or backer that you, as the person behind the business, are well prepared for self-employment, and have the experience and training to make it a success.
Finally, in this section you should mention whether you intend to employ any staff. You should indicate how many you will need, what skills they will require, how much you expect to have to pay them, whether they will be full- or part-time, and what training they will need.
Market Research and Marketing Plan
This is a very important section which will normally take up at least a page of text, and in many cases more. Its purpose is to convince the reader that there will be enough demand for your product or service to make the business viable within the market in which you intend to operate.
This section should therefore summarise your market research, and in particular answer the following questions:
Who will be your customers, and what will be their requirements? How large will your potential market be? Who will be your competitors - their names, addresses and details? What are the main strengths of these competitors? What will be your advantages over them - or, to put this another way, why will people buy from you rather than them?
All your answers should be backed up with facts and figures from your market research. When you are describing die market size, for instance, you should explain clearly how you have arrived at this figure. Statements such as 'There is considerable demand for...' or 'Many people require...' are worthless without some market research data to back them up.
Also in this section you should describe your marketing plan. This concerns how you will advertise, promote and sell your product or service. It should answer the following questions:
How and where will you advertise your product or service? What other forms of promotion will you use (e.g. direct mail, exhibitions, telephone selling)? How will your product or service be sold (e.g. wholesale, retail or through agents)? What features and benefits will you emphasise when trying to attract customers?
Premises, Equipment and Transport
This section will state the premises to be used. If you will be working from an office in your home, or perhaps a converted garage or shed, this should be mentioned as well. Remember, the aim is to convince backers that working from home is a sensible option for your business and you have all the facilities and space required.
Similarly with equipment and transport, you should explain what you need, how it will be obtained - e.g. by leasing, hire purchase or outright payment - and whether it will be new or second-hand.
Suppliers and Sub-contractors
Many businesses rely on other businesses to supply them with raw materials, components or services. Any problems in obtaining these can result in disaster for the business, especially if it is a new one. In this section you should therefore explain who your main suppliers and subcontractors will be and why you have chosen them, stating alternatives where possible. You should also comment on any discussions you have already had with suppliers, agreements reached, credit facilities negotiated, and so on.
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