Having a great business plan can help you get your startup off the ground. It can help you refine your strategy, identify any potential issues, map out what resources you may need, and help you to test the viability of your idea. Having a business plan will not guarantee business success in the same way that not having one means your business will fail. However, it allows for a greater understanding of your business and its target market – and is also a must if you seek investment from outside sources.
In this blog post, we will drill down into what makes an effective business plan and what you need to include in one for yours to not only help you to launch your startup the right way but also help you if you are looking for investors or raising finance!
Blog Contents:
showWhat Is a Business Plan?
A business plan is many things, but as an overall document, it describes how your business operates (or plans to), how it earns its money, how it is to be structured, and other important information such as ownership details and finance projections.
A business plan is crucial for a company’s external and internal audiences. It is more critical for those businesses that are looking to attract investors to a new startup where a proven track record has yet to be established. Some banks can also require one if you want to open an account with them that includes any form of overdraft or credit facility.
A good business plan can also ensure that your team are all on the same page when working towards a goal, ensuring that all relevant parties know why actions are needed and what the overall goal is.
What to Include in Your Business Plan
Every business plan should include six key sections, and we will break them down for you below.
Executive Summary
Despite being at the beginning of your business plan, the executive summary should be written last. The executive summary is an introduction to the business plan and a mission statement where you can outline key points and allow the reader to get the critical points of the plan in a TL:DR format.
Introduction To Your Business
This is your chance to tell the reader who you are, what you stand for and what you hope to achieve. Try to cover as many questions as you think a reader might want to be answered, such as:
- Your business model
- Your industry
- Your business structure
- Your business vision, mission, and value proposition
- Background information on your business or its history
- Business objectives, both short and long term
Try to be concise and to the point when writing this section, no one wants to plough through war and peace, but equally, it needs to outline the key points in detail.
Market Research & Analysis
A good business plan will include a great deal of market research and analysis. If you are seeking investment or financing, this section is critical as investors or financiers will want to see that your business is viable and that you have completed your due diligence before embarking on a new business venture.
Knowing how the market you are entering is operating, who your competitors are and what issues you might face could be the difference between success and struggling for every sale. This kind of research is a critical part of a business plan for others and yourself, so you are aware of any issues you might face and can get ahead of them sooner rather than later.
There are a few methods to use when completing this part, such as:
- SWOT analysis
- Competitive analysis
- Research idea customers
- Address potential pain points
Products and Services
You need to outline what your products and services in your business plan, covering everything from:
- Price points
- Supply chain
- Profit margins
- Paitents if applicable
You do not need to go into massive depth on this section, but you need to let the reader know what it is you are selling, how it differs from your competitors and any USP you will be using.
You also need to include how you plan to deliver these products and services from end to end, such as:
- Sales channels – in-store/in-person/online.
- Storage and shipping methods and costs involved.
- Prices – trade/customer/RRP/profits
Marketing Plan
Business plans should also include how you plan to market your goods and services and the potential costs included. Your marketing plan should consist of an outline of why the type of marketing you are planning ties in with your ideal customers and the benefit-to-cost ratio of this. Marketing channels primarily consist of:
- Social media
- SEO
- Content marketing
- Email marketing
- PPC
Ideally, you need to use a mix of all of the above so that even if you do not plan to use them all simultaneously, including the costs and how you plan to use them in your business plan is helpful to the reader.
Financial Plan
One of the most important aspects of any business plan is the financial plan; this section breaks down the critical elements of the business finances currently and how you see them being in the future. All business’ financial health matters to any investor or financier – as they need to know how their investment will be spent and that they can get a return on it soon.
The level of detail required in your financial plan will depend on your audience and goals, but typically you’ll want to include three major views of your financials:
- Income statement
- Balance sheet
- Cash flow statement
Each section should provide as much detail as possible and be factually correct. Ensure that you break each section down and include the accurate information in each area that is needed, such as:
Income statement: needs to include details about how your business makes money and where all the revenue streams are currently or possibly could be in the future.
Balance sheet: Your balance sheet shows how much equity you have in your business. On one side, you list all your business assets (what you own), and on the other, all your liabilities.
Cash-flow statement: A cash flow statement is similar to your income statement, with one crucial difference: it considers when revenues are collected, and expenses are paid.
Tips for Creating a Startup Business Plan
Anyone can throw some words and figures on a page and call it a business plan, the difference between a winning and losing business plan is in the level of detail and due diligence that is performed. To create a genuinely winning business plan, you need to ensure that:
- It is consistent in tone, language and facts and figures.
- It’s written for the audience it is intended for.
- It is clear and concise about the end goal.
- It has been well-researched and backed by data.
How Can RJF Accounting Help?
RJF Accounting is a Manchester-based team of specialist startup accountants with the skills, knowledge and passion for helping your business get off the ground. We can help you with critical areas of your business plan to ensure that you attract the investment or finance you need to take your startup from idea to success.
We have helped hundreds of founders and startups get the finance or investment they need by focusing on areas that make a good business plan and collating the data required to show your startup as a viable business opportunity.
If you are planning to launch a new business or need assistance with a business plan, why not speak to the team today? You can call the team on 0161 5040629 or email us at hello@rjf.uk.com to see if we can help you get your business finances. We are open Monday to Friday, 9 am – 5 pm!