If you have a business idea then creating a business plan is a valuable tool to put your idea into practice.
What is a business plan?
A business plan is a document that describes your business. It will show in detail:
- why and how you will run your business
- financial forecasts – how much money you will make and how, how you will raise funds
- how you will promote it
- who your customers will be
- how many staff members you’ll need and at what stage they will be recruited.
A business plan is a working document which can be changed and updated at any time. There is no set format for a business plan and it can be a formal or informal document.
Is it necessary to have a business plan?
It is not necessary to have a business plan. However, spending the time to put a business ideas down on paper and planning what you will do should mean that you can work towards creating a successful and financially viable business.
It will help you:
- see whether your idea will work as a business and make money
- set out short- or long-term goals and objectives
- manage your cash flow by listing your incomings and outgoings over a period of time
- show investors you have a sound and reliable proposition, one worth investing in.
What should a business plan contain?
A business plan should be able to answer the following questions:
The following information should be included: | |
---|---|
What will the business do? | A description of the business: the purpose of the business, the products of services the business will offer, who will run the business, the proposed start date of the business, the location of the business. |
Who will set up the business? | The details of the person/people who have the business idea: what experience and qualificattions do they have, what are their current circumstances, how much time and money can they commit to the business. |
How will the business be set up? | This is the structure and the financial plans of the business. |
How will the business be financed? | The business owners may have sufficient funds to finance the business venture or they may need investors. |
Who can see my business plan?
Your business plan may be a document that only you will use. However, if you are looking to secure a loan from a bank or find potential investors, they will often be looking for you to provide them with a clear business plan.
Is there anything else I need to know?
When starting a new business you’ll need to consider the following:
- You must be aware of the taxation implications, such as VAT, self-assessment and payroll.
- There may also be specific legal requirements that relate to your business idea, such as employment law, contract law and licensing.
- You must have an awareness of your competitors, what they offer and their pricing structures.
- Think about your potential customer base and how you will market and sell your product or services. Also think about any suppliers you may need
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