Where do I start with my business plan?

What is a business plan?

We like it when things do what they say on the tin. A business plan does this: it's a document that sets out your plan for how you will start and run your business.

As well as providing you with an opportunity to get your entrepreneurial ideas down on paper, you'll need to create a business plan if you want external finance for your business - either from an investor or in the form of a Start Up Loan.

In our efforts to make starting your own business as easy as possible, Team Transmit have a recommended Business Plan template which you can download for free.

The key steps you'll take when filling out the template are:

• Describing your business idea

  You'll need to include details of any premises you're planning to lease, and the costs associated with it, including rent, utility bills and business rates.

• Finding out what you legally need to trade

  Research whether you or your business require any specialist license, certificates or insurances.

  Every business needs public liability insurance, but other cover and certifications vary according to what your business does. For example, you'll need a Food Hygiene Certificate to open a coffee shop.

• Your team (even if it's just you!)

  You'll list out any people involved in your business and what their roles will be. Think about each person's experience in your industry. What skills and qualities do you each have that will contribute to making the business a success? It might be a good idea to take advantage of flexible, online micro courses specifically designed for small businesses.

• Identifying who your customers will be.

  If you are selling to the public (Business to Customer = B2C) what is your target customer's age, gender, interests, location? Or, if you are selling to other companies (Business to Business = B2B), what type of business are they and why would they buy from you?

• How will you advertise/promote your business?

  Once you’ve thought about your typical customer, think about the best ways to reach them - adverts in papers or trade magazines, leaflets, email campaigns, exhibitions, networking events, PR, telesales, search marketing, social media. And how will you know how effective each one is?

• What will you charge?

  List the prices you will charge for the different products and services you offer and how you’ve arrived at those figures. Take into account your costs, hourly rate, industry rates and expected demand. Remember that price is often determined by the value customers place upon it, not just the cost of production.

• Who are your suppliers?

  For this section, it can be helpful to ask yourself why you have chosen a particular supplier (quality, cost, reputation etc). Consider whether you'll need to put a contract in place to work with them. Will you pay your suppliers upfront, or will they give you a credit account? What happens if one supplier lets you down?

• Who are you up against?

  Regardless of how unique your business idea is, you will always have competitors. Consider who they are and what makes them successful. You'll do this by conducting market research and competitor analysis.

Why conduct competitor analysis?

It might not sound like the most exciting thing to do but you can get a sense of the market you're in very quickly using competitor analysis.

It gives you a concrete place from which you can build your business plan and forms an integral part of the market research section.

What does competitor analysis involve?

Damian recommends looking at five regional competitors and five national competitors, on the following basis:

• Location - where are they?

• Products or services - what are they are selling?

• Prices - what they are charging?

• Target Markets - who are they selling to?

• Marketing - how are they selling?

• Brand - how do they present / position / communicate what they do?

• Distribution - what’s their route to market or sales channel?

• Innovation / Technology - what’s new?

• People / Suppliers - who works for them and with them?

Don't make these rookie competitor analysis mistakes!

1. I don't have any competition!

Damian says:

"Entrepreneurs sometimes get so excited by a new idea that they convince themselves there are no competitors. If this is you: sorry, but you're not looking hard enough!"

Remember that your business can have:

• Direct competition - from others that produce the same product as you

• Indirect competition - from those trying to win custom (and cash) from your target market

"If you write in your business plan that you have no competition, the reader is going to take that as a sign of naivity and inexperience. You will be challenged on this by people who are looking at your business plan."

Damian's competitor analysis example

"This was way out of my comfort zone but I did a desktop competitor analysis to get me started. Within a eight hours I had a very good idea of:

• What business offered which sheds

• Where they were

• Who was buying them

• At what price

I followed this up with some mystery shopper calls and by the end of the next day the research was done."

Damian was able to provide vital information and reassurance for his client, who was afraid of the competition and new developments in the world of sheds.

"By analysing the market and looking carefully at what the customers wanted, it became clear that their buyers were very committed to wooden sheds, so they continued to seek extra investment into the business."

To learn more about how to get your business off the ground, visit the Smarta website and explore flexible elearning designed for early stage entrepreneurs.