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Why is a business plan important?
Why write a business plan? A business plan is not mandatory, but is often essential if you're thinking about seeking finance for your company. It summarises the plans you have for your business and makes you examine whether your plans are viable and whether a market exists for your product or service. Drafting a business plan also forces you to make certain choices and helps you avoid overlooking any important issues.
Preparing a business planYour idea is the basis for your future business. Perhaps you've been thinking about this for quite some time now, but hadn't got as far as putting it into writing. Try to put your idea into writing in no more than a few sentences. Refine your idea as far as you can. In effect, this is the start of your business plan. Once you've succeeded in explaining your idea in just a few sentences, you'll notice that writing a business plan becomes a lot easier, as it provides sharper focus. You can also give it to others to read to get tips and feedback.
Using a business plan format
A business plan format can prove useful if you're thinking about drafting a business plan yourself. Sample business plan formats are available online for download. Alternatively, you could hire a consultant to write your business plan for you.
Business plan checklist
Either way, a business plan should address the following issues:
- Your idea – described in concrete terms.
- Your financial plan – how much money will you need and where will this come from?
- Your organisational plan – how will you set up your administrative system and arrange your insurance cover?
- Your marketing plan – who are your customers and your competitors?
- Details – describe in concrete terms how you intend to put your idea into practice.
- Personal details – information about your entrepreneurial skills and/or business acumen.
Tips for writing a business plan
- Use a template (links to the Gov.uk website).
- Start with a short summary or introduction.
- Set aside plenty of time to write your plan.
- Be realistic and honest.
- Ask others for feedback.