Identifying the best place to start when pursuing your own business can be one of the biggest challenges you can face.
Luckily, we have some great individuals at MSIF and the Finance Hub whom have a wealth of knowledge to share. We asked our team what are the most important fundamentals to get right before embarking on your journey, and ranking top of the list was Business Plans.
Whether you are just starting out, acquiring or expanding your company with funding, a business plan is needed. To help you on your way, we have summarised a 10-step guide of what we believe you need to best be prepared for success;
1. Executive Summary
In brief, say who you are, what you do, how you do it and why there is a market for what you provide. Be sure to include your ambitions and summarise your financial forecasts, resources and current financial position.
2. Business Description
Provide a brief description and history of your business, including details of your sector, growth plans, ownerships, shareholding and past sources of finance.
3. Market Analysis
Which specific markets are you targeting? Give details of your main customers, size of market and what you expect to charge. Also include the quality and service you will provide as well as your major competitors. Completing a SWOT analysis with your plan is also a must!
4. Product Advantages
Really take the time to analysis your product and offerings. How is it better than your competitors?
5. Marketing/Sales Strategy
Detail your market share and sales forecasts for the next two years. How will you price, promote and distribute your product/service? Do you have confirmed orders to be fulfilled or letters of intent stating that customers will buy your product and/or service?
6. Operational Plans
Describe how you will manufacture the product or provide your service. Consider location, suppliers, production, distribution, employees and departments. Outline the roles and responsibilities for financial, managerial and quality control staff.
7. Financial Information
Detail your forecasts for monthly cashflows, profit and loss accounts, and balance sheets covering a period of at least two years. If you are already trading, include the last two sets of yearly accounts and up-to-date management figures.
Your forecasts must be easy to understand and analyse, and most importantly, you should assume that you will get the funding amount desired.
The forecasts should be based on your aims, meaning you must take part in preparing them; even if you decide to outsource support, ensure you are included in the preparation process.
Show the organisational structure of your business, including details of the skills and background of your most important staff. Determine the skillset of your team and whether there are any weaknesses to consider and how you would overcome this problem.
Also provide details of the salaries you plan to pay and any schemes to encourage employee engagement and retention.
9. Risk Evaluation
Say what the risks and threats to your business are and how you will tackle them.
Say how much money you will need, how you will spend it and where you intend to obtain monies from – on what terms.