In part one of our guide to writing a business plan, we talked you through what the first half of your business plan should include, from the executive summary to your management strategy. Here, we go through what else to write up to make sure you cover everything and get your business off to the best start.
Facilities and premises
In this section, you should explain what facilities you need to get started with your business, as well as the location of your premises. You’ll also need to outline how you’ve selected any suppliers that you have, along with a list of all the employee roles your business will need to run successfully.
Now we’re onto the numbers. This section is where you need to provide the financial forecasts for your business based on what you have already said in your business plan. You need to provide a realistic sales forecast and break the total sales figure down into its constituent parts, like the different kinds of products you have on offer.
Next, you need to indicate your cashflow forecast, which shows how much money you expect to have coming in and out of your account. It’s especially important to get this number right as you need to show that your business will have access to money to stay afloat. You’ll also need to give a forecast of your profit and loss, summarising how much each will be for the first couple of years.
By this point, you’re hoping that those potential investors have been won over by your ideas and are ready to invest, so now’s the time to say how much you’ll need and when. Say what you will use the money for – will you use it to buy equipment, for example? If you’re looking for a loan, you need to be able to show that you can afford it, otherwise investors will be tentative in their decisions.
You need to show that you’re prepared for every instance – even if things go wrong. Identify areas in your business where something could go off course and explain how you would handle it. What would you do if your sales were higher or lower than forecast, for instance? If there are serious implications, you may want to arrange contingency funding as a back-up. Writing this section may seem a little worrying, but it’s a necessary step as it helps to minimise the impact of any problems you might run into later on.
Close your business plan with detailed financial forecasts like monthly sales, cashflow and profit and loss. You can also use this final part to provide any other relevant information like market research, CVs and technical specs.
The golden rule
So, now you have an idea of how to put a business plan together, the key point to remember is to keep it brief. It might seem like there’s a lot to cover, but this doesn’t mean you have to produce an epic that requires heavy machinery to lift. Keep it concise and focused.
Find out what else you should include in How to write a business plan – part one