June 28th, 2016 / Insight posted in Blog

How to Write the Perfect Business Plan – Part 1

We’ve all had a light bulb moment at times. For most of us though, the prospect of actually realising our ideas falls by the wayside when we take a bite of the reality sandwich and realise how much work is actually involved in successfully running a business. But for those with the entrepreneurial spark and the drive to bring their ideas to the market place, where is the best place to start? The answer is usually to create a business plan. Listed below are some key tips to keep in mind when building your first business plan.

Consider your team and their responsibilities carefully

You may already have an established team, you may be planning to hire once you have your company infrastructure prepared, or you may be looking to expand. Whatever the case, unless you are going solo, you need to carefully think about which roles need to be filled within your company, who is the best person for which responsibilities and how have you prioritised key responsibilities for your team?

There’s a lot to think about, so be sure to pick your team members carefully and assign them responsibilities that they are comfortable shouldering and delivering. Even if you are going solo, you will still deal with a number of third parties to get your business off the ground – accountants, Companies House, advertisers and so on. Carefully think about the responsibilities you are able to manage on your own, and which ones you will have to outsource and factor all of this into your business plan.

Know your market; do your research

Research is essential to the success of any product or service. How are you going to tap into your market if you can’t identify it? Who are your competitors, and how are you going to stay ahead of them? What issues do your potential clients have and how and why is your solution a viable option for them? How does your market allow for you to make a healthy return on investment?

Market research is invaluable and having an effective strategy for marketing and selling your product and services will be an essential part of your business plan. Remember: Proper Preparation Prevents Poor Performance.

Be thorough with your financial planning

This seems like an obvious point, but expenses in business rack up quickly and can spread out quickly to areas that you may not have prepared for. These kinds of sudden charges can be very damaging to a business in its early stages so it pays to take your time with your financial planning. Try to account for every outgoing expense, tally them all up and consider how you’re going to account for them. Remember it takes most start-ups on average 3 years before they start turning a healthy profit.

So where is your money going and where is it coming from? Think about office space; rent, electricity, internet, heating, office equipment and furniture, refreshments and food. Think about your staff; their wages, unexpected sick days and holidays, liability insurance and any benefits you may offer. Remember administrative duties cost money too – if you want to trademark your company this will set you back a few hundred pounds, not to mention other expenses such as tax. Factor in as much as you can think of and be realistic about what your company will achieve when preparing your financial forecast for the first three years. This will help you avoid potential disaster down the road.

Have you had any experience writing business plans? Tweet us your advice @kingstonsmith and join the conversation, and don’t forget to check back for part 2!