How to write a business plan: part 2
Part two of our guide talks you through the final elements of your business plan.
In part one of our guide on writing a business plan, we talked you through what the first half of your business plan should include, from the executive summary to your sales and marketing strategies. Here, we guide you through what else to write up to make sure you cover everything and get your business off to the best start.
Facilities and premises
In this section, you should explain what facilities you need to get started with your business, as well as the location of your premises. You’ll also need to outline how you’ve selected any suppliers that you have, along with a list of all the employee roles your business will need to run successfully.
Now we’re onto the numbers. This section is where you need to provide the financial forecasts for your business based on what you have already said in your business plan. You need to provide a realistic sales forecast and break the total sales figure down into its constituent parts, like the different kinds of products you have on offer. Then you need to indicate your cash-flow forecast, which shows how much money you expect to have coming in and out of your account. It’s especially important to get this number spot on as you need to show that your business will have enough money to stay afloat.
You’ll also need to give a forecast of your profit and loss, summarising how much this will be for the first couple of years trading.
By this point, you’re hoping that those potential investors have been won over by your ideas and are willing to invest, so now’s the time to say how much you’ll need and when. Say what you will use the money for – will you use it to buy equipment, for example? If you’re looking for a loan, you need to be able to show that you can afford it, otherwise investors will be tentative in their decisions.
You need to show that you’re prepared for every instance – even if things go wrong. Identify areas in your business where something could go off course and explain how you would handle it. What would you do if your sales are higher or lower than forecast, for instance? If there are serious implications, you may want to arrange contingency funding as a back-up. Writing this section is a daunting but necessary step as it helps to minimise the effect of any problems you might run into further down the line.
Close your business plan with detailed financial forecasts like monthly sales, cash-flow and profit and loss. You can also use this final part to provide any other relevant information like market research, CVs and technical specs.
So, now you have an idea of how to put a business plan together, the key point to remember is to keep it brief. It might seem like there’s a lot to cover, but this doesn’t mean you have to produce an epic that requires heavy machinery to lift. Keep it concise and focused and you stand the best chance of holding the interest of your prospective investors.