In every series of The Apprentice, there’s the episode where the candidates sheepishly hand in their business plans, ready to be scrutinised by Lord Sugar’s crack team of interrogators. Pretty soon afterwards, we see the candidates’ hard work ripped to shreds during a series of brutal interviews. Yep, that probably got you thinking… ‘I’m not sure I’m cut out for business and all this business plan lark.’
Wrong. Writing a business plan shouldn’t be a scary thing. It should be an invigorating experience. A chance for you to lay down your business vision and articulate how you’re going to get there, and, ultimately, help you bring your business to life.
It doesn’t have to be a huge intimidating document either. What matters is that it means something and serves a use to your business. Sure, at some point you’re going to need to present it to others – perhaps to get buy in from stakeholders, investors, or staff members – but you can tighten it up when you get to that moment. Remember, it can be an evolving plan. Things change fast in the startup world, so you should be ready to dive back in to your business plan and update it later on.
What matters for now, is that you have a business plan. So, let’s get cracking…
Step one: Sketching out the plan
The hardest thing often is getting started – putting your pen to paper. But when you don’t know what you’re going to be writing, creating your business plan can suddenly seem like an impossible task. Sketching out a plan of all the things you want to include and convey in your business plan is the best way to avoid this inaction. Here are some of the typical things you’ll want to include, but, remember, it’s your plan, so you make the call.
- What your business will do
- The business structure and operations
- Team members and their expertise
- The current and projected state of the market and industry
- How your business will sell and market
- Startup costs and funding required
- Financial projections
- Legal requirements
However, don’t worry about fashioning it all together until the end. Instead, focus on gathering all the information and drafting the sections before you sit down to write it properly.
Step two: Researching the market
This is the fun bit before the hard work really starts. It’s also the bit where you might just uncover some valuable nuggets about, for example, your business’s industry or the types of customer you plan to target. You don’t need to spend too long on this. Plus, you can uncover a lot of this information using free and readily available data. For example:
- Look at competitor reviews on TripAdvisor, Google Reviews and TrustPilot
- Spot trends related to your business using Google Trends
- Go in and actually visit rival stores and offices
Note down all your learnings. You don’t have to put it in your plan yet. At this point, you’re just gathering everything together.
Step three: Evaluating your idea
Hopefully whilst doing your research you’ve spotted some trends or, even better, a massive gaping hole for your business to come in and fill. Start to think and jot down some of the ways that your business idea will come to life in the landscape you’ve discovered through your research.
Refining your Unique Selling Point is so important here – you’re going have a better chance of success if your business offers something different to your competitors.
Also, it’s a good idea to do a SWOT analysis. Work out, based on your findings, where the strengths, weaknesses, opportunities and threats lie for your business.
Step four: Articulate your vision
Before you go any further, sum up in words what your business is about and why it’s going to be a success. Obviously, you could write an entire essay about this, but that’s missing the point. Think of this like an elevator pitch. The simpler your vision, the easier it will be to then write the detail of your plan.
Step five: Your marketing and sales strategy
The small matter of making sure people know about your business. Actually, not a small matter at all. Having a marketing and sales strategy is critical to your success – and a separate project in itself. But, at this point, you just need to get down some key details…
Who are you target audience? How will your brand convey your key messages? What are the most effective ways to reach and influence this audience? Of course, you’ll also need to factor in a marketing budget into your costs (we’ll come to that in a minute). Whilst there are plenty of low-cost ways to promote a business, you can’t rely on doing it entirely on the cheap.
Step six: Structure and operations
Now, we’re getting a little more in to the detail. Start making a list of all the products and services you plan to sell and the different income streams you’ll be generating. Yep, all the glorious ways your business will be making money.
Depending on the scale of your ambitions here, this will impact on your operational set up. For example, the more services you plan to sell, the more staff you will require, the more equipment you’ll need to buy, the more premise space you’ll need to rent. These things all have an impact. Try and list everything down you need to consider.
Step seven: Finances
Oh no, the dreaded F-word. The finance-y bit. With the list you’ve just made, you can start to plot out what your startup and running costs are likely to be.
This will be a mixture of fixed and variable costs. Costs like rent, insurance and salaries are unlikely to change. Your variables are the things that will increase in cost depending on the amount you plan to produce or sell. For example, you’ll need more coffee beans as you sell more cups of coffee. Of course, you can’t be exact with this but, luckily, with the research you did looking at competitors you’ll have a good idea what’s realistic.
Step eight: Pricing
You’re not going to get very far in business if you don’t generate enough income to cover your costs. Your prices are going to need to factor this in, whilst also keeping you competitive and attractive to customers.
It can be a complicated beast, especially when you start playing with the various pricing techniques such as bundle offers or loss leaders. But, there’s no way of avoiding this mathematical exercise – businesses live or die on their pricing strategy.
Step nine: Putting it all together
It’s inevitable that some areas of the plan will be easier to tackle than others. Generally, though, the more you immerse yourself in the mindset of creating a business plan, the easier it will flow. It makes sense to not dive in straight away, and, instead, collect and process information for each of the sections. Once you have all the information jotted down in notes, then begin to write it. The actual writing bit will be easy. And, we promise, 100% worth it when you come out of it with a winning business plan.
