Starting a Business No3 - Business Plan Preparation

As soon as I hear the words meaning: "I want to start a business", my reply usually goes something like: "Business plan..? Do you have one?" If not we might talk through a list of topics which might feature in the yet-to-be-prepared business plan. 

One initial question / reaction is "Why bother?"  My reply might be on the lines: "Don't bother.... if you have a brain programmed with Business-Satnav and the pot of gold ready to get well under way!"  If not there are three reasons:

1. If nothing is on paperso far, the preparation of the business plan will pull together ideas, cautions, contacts, timings, dates, prices and costs, etc etc, etc;
2. your first business plan is the initial route map to and indication of a successful (or not) business; and,
3. when you need funds, the funder (a bank, a charitable foundation prospective partner/shareholder) will expect your realistic evaluation of your business future, so that they can assess whether they will get back a loan or get a return on their investment.

The content of the business plan is likely to contain the items shown in the checklist below.  However, if a funder has requested a business plan it may require you to include some mandatory items.

Checklist for a Business Plan
What you include and in what order they appear will be up to you. The following are indicators of likely items. No doubt you will have been thinking about the business for some time, so much of the business plan will be putting on paper (perhaps for the first time) all the things which have been swirling about up top!

4 x Ps

• Prospect - Services and Products: offering is service(s) or a product(s), customer after-service 
• Place or Location:  work from home (urban or rural) or from business premises in town centre or elsewhere;
• Pricing: basis of charging, eg for a service is it an hourly rate, call-out charge, plus consumables and costs, plus overheads, etc;
• Promotion: promotional strategy to include:- advertising, word-of-mouth, free publicity (editorials), special events, public relations (see Starting a Business No 5).

SWOT Analysis
SWOT analysis is a business technique which the new business start-upper (say, as a sole trader) (or  job-seeker) might use to explore the context for a new business (or job or career).  {Note For this post the emphasis is on the business context. - the Swot examples are merely illustrative and may not regflect a true "fit" in the context for a particular business.}

• Strengths: Personal qualifications and experiential knowledge and skills - related to services/products or the industry; government policy or agency practice in supporting industry.
• Weaknesses: State of the economy in the next year or so.
• Opportunities:  Weakness of the £ encouraging exporters; potential use of social media marketing (SMM); availability of loans from charitable foundations for start-ups; trade generation by Olympics 2012; new green technologies.
• Threats:   Competition; adverse changes in the taxation regime appicable to the industry; work-life style balance.