Why Do I Need a Business Plan?

Before you start your business you need
a business plan. Lots of people start businesses without a business
plan and its no surprise that the vast majority of new businesses
fail in the first three years of opening. When people say to me that
they don’t need a business plan its all in their head, I always ask
them how a bank manager, potential landlord or investor might think
of their professionalism if they cannot produce a business plan that
is well written and looks like some effort has been put into its

Your business plan is a record of your
thoughts and plans for the business which has been recorded in a
written format and is available to refer back to when the business is
open and trading. All businesses go through a period when you doubt
if it’s all working as you wanted, being able to refer back to a
business plan is useful during these periods as it can help to
refocus your thoughts.

So what should be in your business

A profile of you detailing your work
and education history, your knowledge and experiences that will
assist with your proposed business and any other facts about yourself
that will support your belief that you can run your proposed

Details of any skills that will be
needed, this section will cover any training you need to undertake
(such a bookkeeping training), or any skills you would need to
consider that you may need to ‘buy in’ such as an accountant or staff
that would be key personnel in your business that you need to employ.

Equipment needed to start the business
this could be renting a shop of office, stock, computers or vehicles.
I always advise new businesses to record in this area of their
business plan any items you personally own that you need to introduce
into the business along with a current valuation as your accountant
will need this to calculate any tax allowance that may be available
on these items.

Initial Funds needed to start the
business and provide a working cash flow until the business starts to
bring money in through its trading activities.

A cash-flow forecast to identify the
expected incomes and expenditure that the business will have to
identify the potential cash shortfalls so you can identify when
additional funds may need to be introduced into the business.

Marketing plan to show how you propose
obtaining the sales that the business needs.

Contingency plan to cover what you
propose to do if any part of your business plan fails, this could be
diversification of goods to sell, expenditure that you may be able to
reduce or other marketing ideas that you may have.

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