What Is A Business Plan?
A business plan is an essential business document that is fundamental to the success of any business. Business plans are stand-alone documents that provide a reader with an in-depth description of your business, its objectives, strategies, target markets and realistic financial forecasts.
How To Write A Business Plan
A business plan is 75% research and 25% format. You can get help with putting your information into a readable format, but you will have to provide the research that makes up the bulk of the plan.
If you are looking to create a great business plan we can help point you in the right direction. Our mentors have many years of experience advising businesses across Fingal on their initial business plan.
If you would like to get started on your business plan today, please read the rest of this page for advice and download our Business Plan template and guide.
Business Plan Uses - Why Write A Business Plan?
By taking the time to develop a comprehensive business plan you will have a powerful tool for attracting investors, a compelling business plan can help you prove the viability of your business, enabling you to secure funding or investment.
A business plan also acts as a company roadmap. It should clearly state where you are, how you got there and how you plan to proceed. A business plan can be used to help you manage your business by helping you keep in-line with original goals. In addition it can be used to help you measure the success of your business. Your business plan should be updated continually as your business grows.
What Do Investors and Lenders Look For?
Lenders receive an high number of business proposals and usually are unable to spend much time looking at them. Therefore your business plan only has only a few minutes to make a good impression and must provide all the key information relating to your company.
- Is your product or service in demand? Provide evidence that there is a customer base for your product or service. If the product exists today, provide market potential data, market share breakdown, sales history and sales projections for the product/service. If it is a concept, conduct some market research and present results of surveys, focus groups, or test markets.
- Do you have a sustainable competitive advantage? Perhaps you provide your service in such a way that makes you the cost leader?
- Are you being realistic? Investors and lenders can be sceptical when the projections seem too good to be true. Make sure you can back up your projections with reliable data.
Business Plan Structure
Provide a focused and brief summary, no longer than one or two pages in length. A summary will give the reader a first impression of whether they should continue to read on.
Company Description — Business Type, Goals and Objectives
Describe the type of business that you’re in, the product and services you provide, the market that you will target and market competitors. Also include your company history, current business conditions, industry trends and your goals and objectives.
Market & Marketing Strategy
This is one of the most important sections of your business plan and is one that will be examined closely.
Give a broad overview of your potential customers. Describe their characteristics such as their demographics, buying habits, interests and needs. Also explain how you conducted any market research.
In this section include your sales forecast. What revenue do you expect to achieve in the next three years? Are there any other unique considerations you should include? Since cost of sales is usually a company’s largest expenditure, it’s important to forecast it realistically.
Here you will need to consider your competitors, both direct and indirect. Direct competitiors are those who offer the same product or service to the same market, while indirect competitiors offer similar products or services, but to a different market. In both cases, what approach do your competitors take to marketing their products and what makes people buy their products. Determine their strengths and weaknesses and their position in the marketplace. Anyone who reads your business plan may sense danger if you suggest there is no competition for a product or service.
Include industry trends, an economic analysis and optimistic-pessimistic-realistic scenarios. Also, include any anticipated impact that legislation and regulations may have on the market.
Explain how you will sell your product or service and how you will move into new markets. Identify the specific marketing techniques you plan to use.
- How will you identify, contact and sell to potential customers?
- How will you distribute your product/service?
- How will you price your product/ service? Consider materials and supplies, labour and operating expenses, planned profit and competition when determining your pricing. Include your price list in the plan.
- When do you plan to introduce your product/service?
- Present your promotional plan, including your budget. Make sure you describe your marketing mix and include any product literature or marketing brochures in your appendix.
Products or Services
Describe your product or service. Explain any niche you may have. Discuss your competitive advantage — why people will choose your product over your competitors’, the benefits of your product or service and how you will sustain your edge.
Describe your business structure, including details of your management team and their responsibilities, qualifications and experience. Also, describe the legal structure of your business.
Describe how you plan to operate your business. Go into detail about location, facilities, equipment, raw materials and suppliers, workforce, hours of operation and methods of record keeping.
These projections serve to demonstrate not only the need for funds but also the potential future value of equity investments or debt repayment. Developing proper financial projections and cash flow is, therefore, a critical factor in obtaining capital for your business. It may be the most crucial task in determining the viability of your business. You will need to:
- Establish the need for funds in the amount requested
- Demonstrate your ability to realise investments or repay loans
- Indicate your understanding of the financial implications of your business’s growth plans
- Your forecast should cover a minimum of three years — a period in which realistic assumptions can be made without much speculation. Your forecast should be broken out monthly, at least until you achieve positive cash flow. This is important because an overall annual cash flow total could hide some cyclical problems that you have and should provide for in your financial plan
Be sure to include:
- Operating Profit and Loss Projections: Project revenues and expenses out on a month-to-month basis for the first year and on a yearly basis for the next three years of operation.
- Cash Flow Projections: Project all cash receipts and outgoings on a month-to-month basis for each of the next three years. Cash flow analysis is critical to any capital investment and the overall survival of the enterprise.
- Balance Sheets: Project your assets, liabilities and retained earnings at the end of the first, second and third years. Because your balance sheet performance has an impact on your cash flow (current assets and current liabilities), it will be a key concern to potential investors.
If you are looking for funds, you’ll need to include this section. Based on your financial forecast, determine how much money you require, when you need the money, how you will use the money and how you will pay it back.
An important point to remember is that you must show that you have the potential for continued profitability. Be sure to include:
Start-up Plan: Present the tasks involved, their priorities, how long each task will take and who is responsible for each task.
Three Year Plan: Project how your business will compete in years three to five. Much of this work is done in the financial forecast, but you will want to support it with a clear explanation.
- Table of Contents — Make sure you include a table of contents in your business plan, especially if its length exceeds more than ten pages. It should appear after your summary but before your company description.
- Addendum of Supporting Documents — There are some documents that don’t warrant inclusion in the body of the plan, but are important enough to offer as support. These can include; Letters of reference, Legal documents of the business including articles of memorandum, Titles, insurance policies, partnership agreements, patents, marketing documents.
Download Our Business Plan Template & Guide
Business Plan Template and Guide Document.doc (size 135.2 KB)
Contact us today if you are looking for some advice on your business plan.