If you have a great business idea, write it down. If you want to grow your business, you also need a plan.
If you have a great business idea, the first step is to write it down.
Then you’ll need a Business Model Canvas to flesh out the idea. Download your free canvas now.
Later, you will need a full business plan template. Download a free, easy-to-use, business plan template here.
You need a plan to raise investment
Your business plan should cover objectives, sales, strategies, marketing and financial forecasts, over a short to long-term period.
It is useful to remember that using a business plan can help you to hone your business idea, as well as set goals and track your progress.
Your plan should be time-specific, and you should reference it regularly. Investors, lenders and State bodies want to see convincing details in your plan.
- Describe what you intend to do simply and clearly
- The problem you are planning to solve for the customer
- How well you articulate the “value proposition”
- Identify the market segment you plan to operate in
- How you plan to get your product to market (“the route to market”)
- Your business model
- You have a good understanding of the competitive landscape
- Terms like “value proposition” and “route to market” are explained in more detail in the ThinkBusiness guide to a marketing plan.
What do I put in my business plan?
So what does a business plan look like, and why is it important? Every plan should have a solid structure. There are a number of elements to a business plan that you must cover.
Cover and confidentiality clause
Ensure the cover of your plan carries your branding and maybe even a photograph of your product.
It is always good practice to include a confidentiality clause. You should ask the recipient to sign this, as you need to ensure that sensitive information included in the business plan is treated confidentially.
This is a brief summary of your business plan, explaining all the relevant sections succinctly. You will only know the content of your executive summary after you have considered all elements of your business’s operations, so complete this section last.
An executive summary is important because it gives banks and prospective investors a quick insight into what your business is all about, and gives them the impetus to consider your business plan in more depth.
Many business owners miss out on investment because the executive summary doesn’t grab people’s attention. Failing to take the time to write a snappy and informative executive summary could cost you in the long run.
There are a number of factors to include in this section of your business plan, including:
- Shareholder and promoter information
- Adviser information
- Legal status of the business
- Main products and/or services
- Long-term aim
Your company description is important because it will show you have a clear understanding of what it is you’re trying to sell, the supports you’ve identified to help, and your interpretation of how the business will perform.
Your long-term aim will be your overall target, and your goals will pinpoint how you will get there. As with all sections of the plan, ensure your language is clear and easy to follow.
Here, you will complete different analyses, such as the PESTLE analysis and the SWOT analysis. These cover political, economic, social, technological, legal and environmental factors; and the business’s strengths, weaknesses, opportunities and threats, respectively.
Marketing and sales
This section covers areas, such as:
- Customer trends and opportunities
- Marketing and sales strategy
- Customer service
This is important, because it gives you the chance to delve deeper into who it is you’ll actually be selling to, how exactly you’ll do it, and how you’ll create awareness for your product or service. There is no room for waffle here, as experienced professionals will spot it a mile away. Be clear and concise, and do not include any unrealistic projections.
This identifies the key players in your business, along with a hierarchical structure, if applicable. Identify the main senior members of the business here, and use the chart provided to establish the people that report to those senior staff members, if it is relevant.
Remember to identify any mentors that have helped you, and give some context to explain their involvement, such as their link to your sector and their experience. Including this section will show that you have others involved, preferably those with complementary skills to yours.
Early-stage investors are looking for businesses where the founders have a strong track record and “domain knowledge” in the market segment they are addressing. For example, a founder with experience in a specific area of enterprise software is likely to have an edge on an individual who might have technical skills but doesn’t know about that niche.
Investors also like to see teams where there is a good combination of skills or where there are gaps through which external advisers or mentors can help.
R&D and business assets
Include any R&D funding and detailed information on business assets here. This will show the interest your business has already generated, along with its value.
If you are a start-up and your business plan is about trying to secure investment, you need to describe how your product or service is different and how it will enable you to complete. Investors will be looking at whether your product or service is indeed innovative and whether it is “defensible” against others in the marketplace.
In reality, it is unrealistic to expect that any new product or service will be the first to market, but that doesn’t mean it can’t be innovative. What investors are looking for is whether you have a fair chance to compete.
A critical part of your plan, this section includes details of your loans, security and guarantees, internally generated capital and other funding. You should include both historic and projected cashflow statements, balance sheets and profit and loss accounts.
Include the financial assumptions on which your plan is based, including the cost of sales, overheads and investment, and include a sensitivity analysis to track any changes to these projections. See the ThinkBusiness.ie sensitivity analysis template to help you. Any funding requirements should also be included.
Financial projections are a crucial part of your plan. Investors and banks will scrutinise these figures and make a judgment call on whether they are credible or not, so you will need to be able to justify the assumptions you make.
If you are seeking equity or bank finance, you might consider including a roadmap on how you plan to meet your commercial goals, showing the investment you will need. Your roadmap should have milestones that are clear, achievable and measureable.
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