I am often asked, do I need a business plan? Simple answer, yes. Everyone who wants to run their own business needs to write a business plan. But why?
You may be here because you are thinking about starting your own business, perhaps someone has asked you for a business plan or maybe you have lost focus on your business.
Did you know? The UK five-year survival rate for businesses born in 2013 and still active in 2018 was 42.4% (ONS, 2018)
Below I will set out some of the reasons you should write a business plan, along with some questions you need to consider when writing it. It may feel overwhelming but remember I can help!
Did you know? I offer a free 20-minute telephone consultation for all new clients.
First things first, if someone asked you now what your business was, could you give them a clear, succinct explanation? Would that person be able to go away and explain it to someone else? To be successful you need to have a clear idea for your business. Word of mouth is incredibly important to grow your business so make it easy for others to share your business idea.
Do you have a clear idea of what you want to achieve this year? Could you say whether you met your goal last year? What are you changing this year? Are you clear on why someone should buy from you?
Did you know? 57% said that they have plans to turn their side hustle into a full-time venture or would like to do so at some point in the future (Hiscox, 2020)
You need to know what you want out your business. Whether it is part-time, a hobby or something you want to be full time and to grow, you need to have a goal. There is a common misconception that a business must have multiple people involved and turnover millions of pounds, but this is not true. Your business can be whatever you want it to be, it’s yours.
What is your business? Why are you running a business? What is your motivation? What are your potential problems? How are you going to overcome them? Where are you now? Where do you want to be? How are you going to get there?
Did you know? 1 in 4 people in the UK are running at least one business project alongside their main day job (Henley Business School, 2018)
If you are looking for funding; whether that is crowdfunding, a bank loan or investment, you will need to write a business plan. This is important to show those that are about to take a risk on you that you have thought through all the potential problems and ways you are going to overcome or minimise them. They will also need to see your financial projections so they can see when/if they will get their money back or another type of return.
Do you know what your budget is? Do you need funding? Where are you getting your funding from? Do they need to see a plan? Are you clear on your finances? Do you know your breakeven point?
Did you know? The average age of a company on the total register at the end of March 2019 was 8.5 years. Despite fluctuations in recent years, the average age of a company has gradually declined from 10.7 years since 2000. (Companies House, 2019)
When going into business, you might decide to get a business partner. There are a huge number of considerations here. I have worked with partnerships of two or three people, some have gone on to have success, others split during the sessions and have gone on to have separate businesses.
Do you have a partner? Have you just assumed you are on the same page? Do you have an agreement in place?
Did you know? 1 in 6 people in East England, West Midlands, East Midlands and London see starting their own business as the only way to advance their career (SME Loans, 2019)
When planning your business, you need to have a really good idea of who your customer is. Only then can you work on your marketing strategy. This is how you will best meet your customer’s needs.
Do you know who you are targeting? Do you know how? How are you measuring the success of your marketing strategy?
Did you know? 76% of customers expect companies to understand their needs (Salesforce)
Many new business owners will have a variety of friends and family offering positive feedback and supportive advice; however, it is important to undertake thorough impartial market research. You need to find out about other businesses in your industry to identify what they are doing well and what you can do better. This research will save you a lot of money and time.
Do you know about the competition? Has the market changed? Do you have a new product or service? Has your business changed? Has it grown, shrunk, changed what it offers?
Did you know? More than 80% of companies who prioritize customer experience report an increase in revenue. (Hubspot)
Business planning is an integral part of your business’s success. It should help shape your research, products, sales and marketing strategy and your financial forecasting.
“It is not the strongest or the most intelligent who will survive but those who can best manage change.” — Charles Darwin
Your business plan should be a live document. It should evolve as your business evolves.
Business plans are not just for when you start your business or apply for funding.
A business plan cannot guarantee the success of your business, but it can help you plan for the obstacles along the way.
Remember, I offer a free 20-minute telephone consultation for all new clients.
Start up with Sophie is run by Sophie West, Start Up Business Adviser. Sophie has helped over 300 people write their business plan and develop their business.