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Writing a business plan and getting it right

Written by: Helen Dowling

Article Overview: Helen Dowling from Exceptional Thinking (www.exceptionalthinking.co.uk) has worked with 300 small businesses and start-ups around the UK helping them to put together the business plan they need to get funding or grow their business. Here are our top tips to getting it right.

Writing a business plan and getting it right

1. The most difficult part about writing a business plan is knowing where to start. If you have lots of thoughts floating around in your head, brain dump all of these onto a piece of paper. Once you’ve done this, it’s much easier to start organising your thoughts into categories i.e. finance, how the business will work, marketing etc.

2. Don’t be tempted to write all of your business plan at once. Work on a section for a little while and then after about 30 minutes, stop. Have a break for a little while and come back to it. Most of the really good business plans I’ve seen have been written in this way and the person writing it doesn’t get stressed by it either.

3. Have a think about whether you really need a business plan. If you need funding, you definitely need to write one. But if you don’t a two or three page summary of what you’re going to do with your business is much better than a 30 or 40 page document that you’ll never look at again. I don’t actually like the term “Business Plan”. I prefer to think of it as “planning the business” which is what you are doing. You’re saying “this is where I am now; this is where I want to get to and this is how I’m going to do it.” Much better that you think about these things rather than writing a book.

4. People mainly struggle with the market research and cash flow sections of a business plan, so leave these until last. The best way to approach a business plan is to do the easy sections first. Your business plan should have the following sections in there:

Section Content of section
Executive Summary - A summary of the business plan. Leave this until the plan is written.
A summary of the business - This bit has contact details of the business and your goals for the business (where do you see it in a year’s time?).
Management - This is where you write why you wanted to set up the business, what you hope to get out of it and why you’re the best person to run it.
The business - What is your business and how will it work?
Marketing and market research - Who are your customers, competitors and market trends?
How will you market and promote the business both on the internet and off the internet?
Financial & Funding - This is where you write your pricing strategy, any funds you’re needing and the purpose they’re needed and how you came up with your cashflow forecast.
Cashflow Forecast -The dreaded spreadsheet – more about this later.
Appendices - Anything else that doesn’t fit into the above sections

When you’re putting your plan together, start with the sections you find easiest i.e. description of the business and how it will work, the management of the business, pricing and marketing. Once you’ve done this, you’ve done over half and it’s not too bad to put the rest of it together.

5. The market research section is one of the hardest bits people have to complete. So, I would advise that you break this one down and complete it in the following order:

• Go to www.yell.com and the Internet. Look for other companies who are running the same type of business as you. Go to their websites, visit them or phone them up. What do you like about them? What don’t you like? How will you be different? What are their prices?
• Create a spreadsheet and list your competitors with the good bits and bad bits about them.
• Write a summary of your competitors and what you’ve found in your Business Plan.
• Now let’s look at your trends. Call into any bank on the high street and ask for a “Business Information Factsheet” about your business. You can see an example of one at
http://www.exceptionalthinking.co.uk/docs/boarding.pdf . Print this off and ask for a factsheet about your business. This will give you an overview of your industry and is a really good starting point. You can also research your industry by looking at your industry’s trade association – they usually have loads of different facts and figures that help you back your idea up.
• Finally, let’s look at your customers – write down:
a)Who they are.
b)Where they are.
c)What are their likes / dislikes.
d)Why they would buy your product or service.
e)How they will find out about you.
f)When they will buy your product or service.
You may also want to produce a questionnaire and give this to your customers to find out their views.

For the market research section, you are trying to answer the question of “Is there a demand for your product or service?” by giving the reader facts, figures and trends to prove this. You will need to show you have been thorough as this is the area that most business plans fall down on.

6. The other area that people usually struggle with is the cashflow section. For this section it is worth you getting hold of a business plan template, which you can get for free at your local Business Link or bank. Have a look at the cashflow section.

Start with your costs – have a look at the list on the left hand side of the cashflow. Go through each item one by one and see if it applies to you. If it does, when will you have to pay for it? Let’s take an example of a phone. You will probably be making some phone calls in your business. Let’s say you will be spending £20 on this every month – plot £20 in the columns for month 1, 2, 3, 4 etc all the way to the end.

Let’s say the next item is premises and you will paying the rent of £90 every three months – plot £90 in months 1, 4, 7, and 10. Do the same for all the other items in your cashflow.
Once you’ve completed your costs, you now need to look at your sales. Work out how many customers you will have a month and on average how much they will pay. Will they pay immediately or will you send them an invoice and give them 30 days to pay? Remember your sales will vary according to the time of year so take this into account too.

Now you just need to add everything up and your cashflow will be complete.

7. I would definitely recommend that you go on a business start-up course to help you write your plan. Most Business Links (www.businesslink.gov.uk) will run one in your area and many of the local colleges do now too. They will be able to walk you through the process of writing a plan.

8. Don’t get hung up on making your plan so perfect that it never gets finished. If you think “Am I doing too much?” the chances are that you probably are doing too much, so you need to stop and evaluate what you’ve done and whether you’ve answered all of your questions.

9. You might want to think about using a professional to write your business plan for you. We’ve worked with many business owners to complete their plan and all of them have been successful as we know what lenders are looking for. We usually work with people who don’t have the time to complete it themselves, so if you’d like to work with us, please feel free to get in touch – helen.dowling@exceptionalthinking.co.uk or call 0845 644 9371.

10. Finally if you have written your business plan and would like us to review it for you for free, please feel free to send it over. We won’t send your plan out to anyone else and we are happy to sign a confidentiality agreement if you would like us to. Send your plans to helen.dowling@exceptionalthinking.co.uk

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Related Forum Posts
Is A Business Plan A Waste Of Time? - According to various government statistics, up to 80% of businesses will fail within their first five years of operation. That number is staggering to me. At the same time, when I look at most business owners, most of them do not have a business plan for where they want to go. When you ask entrepreneurs why they don’t have a business plan, most of them will say something like: “it’s too much work”, “I’m not trying to raise money”, “it’s all in my head already”, or “my business changes too often for a business plan to be worthwhile.” Sound familiar? Did you write a business plan for your company when you first started? Are you planning on doing it for your new business idea?
Re: Is A Business Plan A Waste Of Time? - A business plan is never a waste of time. A friend of mine was funded by the quality of his business plan. The banker looked at his business plan and concluded that he knows what he is doing.
Re: How long should a Business Plan be? - Hi Sally, The length of your business plan can very, really, on the type of business you are planning to open up. It also varies based on just how extensive you want to be with your plan. The more ideas you have, the longer the business plan will be. But if you want to just create an outline on the main points that you would like to focus on, then it is apparently shorter. But if you can go for the former, that would be better. THe more details you include, the more efficient it would be for you when it comes to executing them later on. However, it all boils down to your own preference and how you would like your business to be.
Is "Good" - Good Enough - I was just reading the thread about whether people need a business plan and this idea hit me. Someone commented that if you don't have a business plan and you're doing all right - then why spend the time or money. But, is doing good or doing all right - good enough? Maybe you're a business that is getting by and making the bills. What if, taking the time to really evaluate your business with a detailed business plan could help you see places to make some changes which could take your business to the next level? Would it be worth your time? I think it would definitely be worth the time. That could be because I've worked with a number of business owners who were "getting by", but once they committed to having someone evaluate the business - they saw a drastic increase in their revenue. So, why couldn't or wouldn't an entrepreneur do an evaluation to determine where the business is, where it isn't working and where it should be going? This could be done in a business plan format. Just some random thoughts. Shri
Re: What makes a good business plan? - Another important component of a good business plan is that it follow the SBA recommended format. That is especially true if you plan to use your business plan to request funding.


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