So what is a business plan and do you need one? Well, the short answer is yes, you absolutely need to write a business plan! To fail to plan is to plan to fail and what’s more, if you don’t have one then you will almost certainly run into problems.
Now here’s the thing, if you head over to Google and you just search how to write a business plan, or business plan template trust me you will end up down a rabbit hole and by the end of it you’ll find yourself doubting yourself if you really want to start a business – it can be really daunting.
However, don’t worry because I’m here to help! And I’m going to run you through the top five points for a really successful business plan.
Now, #1 you need to understand what your business will actually be doing.
Are you offering something completely unique? You might think that you have a unique offtering but trust me – you need to go and check that out and you’ll be surprised what an advanced Google search can give you.
If you are offering something unique then brilliant but if not, chances are you are going to have competitors. So, if this is the case, where do you sit in that competitive landscape? What sets you apart, what are you doing that’s different and what is your Unique Selling Point (USP)? You want to articulate all of these points right at the beginning of your business plan. I want you to ask yourself ‘why do I have the right to win’, ‘why would I win above someone else’ and this information will outline why you are going to succeed.
When you have all of the ‘what’ covered, you’re going to need to move onto #2
which is your all-important customers. You need to ask yourself who is your customer and more importantly, where are your customers and you need to detail of this in the business plan.
Now chances are, most customers that you’re hoping to attract are currently buying what you sell or something very similar elsewhere. Don’t be naive and assume that just because you build it, they will come! You need to put some thought into how you are going to attract customers and what is the cost to go out and find those customers, this is your Cost Per Acquisition of each customer.
Next, I want you to think about whether your product or service has a one-off use or whether you will acquire that customer and keep selling them products over the lifespan of that customer. When you hear people talk about lifetime value, it can often be that you spend more on acquiring a customer if you are going to get multiple hits out of that customer over their lifetime value.
Moving on to #3, how much money do you need?
Most businesses fail not because they don’t have enough customers and not because they don’t have a great product, it’s because they run out of cash so here’s the really important stuff that you need to plan and articulate in your business plan.
First of all, you’re going to work out how much money you actually need to get started. You’ll often hear the term Bootstrapping used and that means you’re going to do everything on the minimal amount you can so as not to put financial strain on the business.
Following this, you’re going to have to calculate all of the costs that you’re going to have to expend to get the business started and keep it going, then I want you to think about how much of your product that you’re realistically going to sell and of that, what is the profit that you’re going to make?
Now, that could be brilliant at working out your profit, your costs and your net profit, however what’s more important than that is your cash so what you need to understand is when do I have to pay my suppliers that I’m buying things from and are my customers paying me straight away or are they paying me on 30 days or perhaps longer so that you can plan the cashflow requirement of your business. Cashflow is a big deal and one that we will cover in a lot more detail moving forward!
So, #4 what do I call myself?
I know that your business name is probably the first thing you came up with when you decided you were going to become a business owner.Most people fantasise about starting their business and they say ‘well I’ve got the business name!’ Well actually, points 1-3 are way more important so I don’t want you to even think about nailing the name down until you’ve got those covered!
First, brainstorm some ideas. Just because you think you have a great idea doesn’t mean that your potential customers will think that it’s a great idea so ask your friends and family for their opinions but ask them to be really honest. People often get swept up in the excitement and say this is great but you really want their honest feedback.
When considering possibilities for your business name, It’s important to create a business name that is memorable and easy to spell but also the availability of that name. Is the domain name available when you do a web search, can you buy the web pages for the name, can you acquire those social handles? It might be a great name but if you can’t get any of these then there’;s no point starting on that front. And, what I will say is once you have established a name it is very expensive and complicated to change it so you want it to be right from the off!
#5 How am I going to describe my business?
Imagine that you’re at a party and someone asks you, what is your business and what does it do? How are you going to convey this quickly and succinctly? Clear vision is really important and it’s going to help you to inform that plan – we’ll also talk later about mission and vision and how to get all of those ready.
So, once you have these 5 things nailed, these will go into your business plan. Let’s face it, these are pretty big subjects to get you started and it’s not a 6 minute job putting these things together but these will give you a starting point. They’ll give you the basics to get going and then I’ll cover each of those in a lot more detail as we go on!