Failing to plan is planning to fail.

Business Link Adviser Steve Reading explains the importance of having a business plan.

So you’ve got an idea, it seems foolproof, you can see an endless market to exploit. What can possibly go wrong? Sadly, the majority of new business start ups will fail within three years, with half of those failures inside the first six months.

So what can do to ensure that you have a better chance of success? Hopefully this article will help you ensure that you become one of the business start up successes.

Research shows that having a business plan is vital to the success of your company, yet so many small businesses start without one.

Compiling your business plan can be quite daunting but it shouldn’t be an intimidating process —a good business plan can focus the mind as well as assist in securing finance and support.

Your plan will clarify your business strategy as well as defining your long-term objectives.

It provides a ‘blueprint’ for business operation with a series of benchmarks to check your progress.

Ideally it should also contain a cash flow forecast, a vital tool for convincing your bank — and possibly key customers and suppliers — to support you.

Consider the funding question from the opposite side of the desk – if a friend or family member asked to borrow money from you for this idea, how would you react?

Start by asking yourself “where do I want to be in 12, 18 and 24 months time”? From here you can begin to start questioning your approach to growing and developing your business idea.

Here are a few pointers to help:

About your Business

What type of business is it and what are its goals and objectives?

What is your product or service and how are you going to sell it?

Who are your customers and why would they buy from you?

How much will your products or services cost?

What premises will you be using?

Are they suitable?

What are your staff requirements and costs?

Who are your suppliers?

What problems could arise with your supply chain?

What type of business are you? (sole trader, partnership, limited company)

What legal processes do you need to go through? ie. Licensing, copyright, insurance, health and safety, food hygiene

What are your future growth plans and what affect will these have?

What are the threats to your business and how have you planned to overcome these?

Market analysis

What is your market and where does your product or service fit in?

How big is this market and how much money is spent on products or services similar to yours in a year. Profile your clients in detail, covering what they like or dislike about your service

Who are your competitors and how are you different from them? - Give your projections in terms of number of customers, contracts obtained, etc. Marketing strategy -

Present your marketing strategy – how will you get the edge on the competition? Don’t rely on just being cheaper. - What makes you different from your competitors? What promotion tools will you use - Do you need to advertise? If so how and where?

Management

Who will be running the business and how are they qualified?

How will responsibilities be divided?

Financial

Where will the money to pay for the start up come from and how will it be spent? - Project the following: Cashflow with explanation (sales, expenses, profit); profit and loss forecast; break-even analysis.

The most important thing is that your Plan becomes a ‘live’ document – it will evolve with your business. You will be able to measure your progress both in terms of market penetration and financial success and prioritise your targets and new opportunities that will undoubtedly arise.

Your business start up is the beginning of a long journey for you, one which will provide you with excitement, independence, success, set backs and freedom from ‘the boss’. Your Business Plan is your route map for this journey. Do it carefully and you will avoid unnecessary detours and costly errors. You will then be able to enjoy the fruits of your own hard work.

To find out more about business planning or any other aspect of business, call the Business Link Customer Service Team on 0845 600 9 006 or log on to www.businesslink.gov.uk

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