ByteStart’s Start-Up Guide – Part 5 – Why you need a business plan

If ever there was a key skill you’ll need in your business – it’s planning. You can still be your own boss if you’re not the most organised of people, but you’ll find it a very tough slog.

No matter how good or bad you are at forward planning, a solid business plan is arguably the most important business-related document you will ever create. It’s highly recommended for anyone starting a new venture, as a way of ensuring you plan the kind of business you want to create.

If you’re going to need financial support from a bank or an investor, or you need to attract a business partner, it’s an absolute essential.

Your business plan need only be a few pages long, containing key information about the business. Don’t worry too much about the format; focus more on getting the information right and the correct message communicated.

Here’s a suggested list of contents:

1. Objectives
What do you want to achieve from your business? List key goals including a financial overview.

2. Executive review
An overview of what the business will do and how. Include the legal structure, who will work in the business and what roles they will fulfill. Potential investors will use the information in this section to decide if the rest of the plan is worth looking at.

3. Market analysis
How many businesses already offer this product or service, and where does your new venture sit in the marketplace?

4. Demand analysis
Who are your potential customers and how likely is it they will buy from you? Are you at the premium end, the budget end or somewhere in-between?

5. Analysis of the competition
To launch a successful venture you need to offer something different. So work out what’s already out there and identify the gap that’s open to you.

6. Marketing strategy
Once you know the message you want to give out, show how you will do that. Don’t get into too much detail but give an overview of strategy and costs.

7. Success factors
What things must happen to make the business a success? Listing them in the business plan keeps them at the front of your mind.

8. Finances
List your likely costs and predicted revenue. This is normally done for three years. Remember most people underestimate costs and overestimate revenue.

9. Conclusion Sum up your business plan in a few sentences.

Remember that a business plan should be a living document. It’s no good to you if you complete it and stick it on a shelf to gather dust. Even when you are running your business, get into the habit of reviewing your plan at least once a quarter.

For dozens of guides to help you create an effective plan, visit our dedicated Business Planning section.

On to ByteStart’s Start-Up Guide – Part 6 – What taxes do small businesses have to pay?
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