How Do I Write A Business Plan?
What is a business plan?
A business plan is like a good cup of coffee - it has a useful container that is a pleasure to hold (the cup) and it is hot and stimulating (the coffee). One without the other is a disappointing experience. Make your plan a great experience by following the steps below.
Why should I write one?
“Businesses that undertake regular business planning have an average profit margin of 54%. For those that do not the average profit margin is 35%”
LloydsTSB Feb 2004
The secret with a business plan is to keep it as simple as possible. There are four good reasons for doing one…
- A business plan is essential if you want to borrow money
- You do it to convince yourself that you have a workable idea
- You do it to convince others that you have a workable idea
- Not doing one is a key indicator of business failure
Your first audience
Guess who the first audience is? The first person you need to convince is YOU. When you write a business plan you are primarily writing to convince yourself that the idea stands a better than average chance of working. This is important because unless you are totally convinced it will show up in weak writing and poor results when you try and convince someone else, especially if you want them to give you money.
So, after you, who is the audience for your plan?
Your bank? Then use a template that they are comfortable with. The big four banks all give these templates away in their business start up packs. Look at the business pages of their websites where you can often download it.
An investor? Take a look at the surprisingly simple business plan template on Peter Jones (of Dragons Den) website. You’ll find that investors are far more interested in you and your team than they are in the product or service. Make sure you present yourself and your team convincingly.
A major investor? Watch the two presentations below by investors telling you exactly how to write your plan and pitch - David Rose (aka The Pitch Coach) and Guy Kawasaki (Garage Ventures). Make notes because they tell you exactly how to do it.
How do I write a business plan?
The easiest way to start a business plan is to find a free template and start filling it in until you are happy with the final result. To begin with though, grab a piece of paper or a laptop and answer these questions:
| Section | Detail |
|---|---|
| Your Purpose | Why does the business exist? To do what? |
| Your Objectives | Where do you want to go? |
| Your Strategy | How will you get there? |
| Your Budget | What are your costs? How much can you sell for? How many sales are you predicting? |
Most business plan templates ask you the same questions, which build on these ones. Rather than waste paper by reproducing one here, go get that template and you’ll see what I mean.
How do I find a template?
- Right click on this link to download the Lloyds Business Plan teamplate
- Use free business plan software from the major high street banks. Go here for details
- Ask your local business link or your accountant for one
- You can even get one from Peter Jones of Dragons Den!
Create your own - put these headings into a word document:
| Section | Detail |
|---|---|
| Executive Summary | A summary of the document |
| Company Description | Some background |
| Product or Service | Details of what you are selling |
| Market Analysis | Details of who is going to buy it and why |
| Strategy and Implementation | As much or as little information as you need about how you are going to make this work |
| Management Team | Your key people and their status - employed, contracted, bought in for specific roles. Include those who play a supporting role as well |
| Financial Plan |
|
Remember that the main reason for a business plan is to convince yourself that your idea is workable and makes sense. Even a single sheet of A4 that sets out your intentions is enough.
Of course, if you want to borrow money then you will need a more detailed plan that stands up to rigourous scrutiny. When you have got one you are reasonably happy with, go and see the business manager at your local bank and ask them to read it. I promise you will learn a lot.
