Key areas to be addressed in a business plan
I NEED to complete a business plan to apply for funding and to present to a bank. Can you outline the main areas that should be addressed in my plan? Every business needs a plan. Your business plan will keep you focused and help convince investors to lend you money. But how do you write the perfect business plan? Here are some steps to help you get it right. The reasons for writing a business plan are as follows: · To clarify your ideas · To discover and solve problems · To get feedback from others · Use as a financial health check · Use as a formal document for banks, funding agencies and investors · To guide you as your business grows If you’ve never written a business plan before, it can be a daunting prospect. Here is an outline of the key areas to be addressed.
The executive summary: This is where you describe your company and the product or service that it will sell. This must be brief to catch and hold people’s attention. Describe the goal and mission of your business in just a couple of sentences. Work hard at this and try to make it memorable.
Who are your customers?: Do you have a clear idea of the type of people (or businesses) who will buy your product or service? If not, think carefully until you do. This is one of the first questions any investor will ask you about your business plan.
What are your opportunities?: Successful businesses think big. You might be starting small, but you don’t have to stay that way. So write down the possible opportunities for your business as it grows. Will you be selling on-line? As the business grows, is there scope for a retail outlet? What other opportunities will you have if your business grows as planned?
Understand the competition: Who are your direct competitors – those selling the same products as you? Who are your indirect competitors – those whose market overlaps yours? What will prevent other companies competing with you – what are the barriers to entry? What is your USP (unique selling proposition)? In other words, what’s your point of difference that makes you different from your competitors?
Build a simple financial plan: All business plans should contain some financial information. This should include the overall costs of setting up your business, operation costs, cash flow projections and profit and loss projections for the next 3-5 years should be outlined.
Include an outline marketing plan: For this section of your business plan, you need to think about the five “Ps”: Pricing, Positioning, Promotion channels, Profit and Place
Evaluate the target audience, the better you evaluate your target audience, the more comprehensive your business plan will be. Consider: Demographics – such as age, gender and social status; Location – perhaps a specific area, town, or even country; Profession – eg Accountants, Nurses, doctors, for example.
Plan your operations and People: Put your vision to one side for a moment. What are the daily tasks that need to be done when running the business? Include all business processes such as manufacture and packaging. Try to cover all departments too, including sales and customer service. Think about staff and skills sets you have and you need to move forward.
For more information on how to write and present a business plan, contact Paul Redmond on 053 9170507 or email paul@rda.ie Jim Doyle ACMA QFA is a partner in RDA Accountants, offering full accountancy, business advisory, tax advisory and financial services | 5 Upper George Street, Wexford | Louisville House, Waterford Road, Kilkenny | | www.rda.ie RDA Wealth Ltd trading as RDA Accountants is regulated by the Central Bank of Ireland
RDA Accountants 053 9170507