Expert Guest Blog by Stacey McIntosh, Editor, Sage Advice UK & Ireland.
If you’re trying to secure funding for your business, you’ll need a business plan.
A business plan is essential to the start and growth of your company as it not only acts as a blueprint to what your business could potentially become but shows any funders that your business is a worthy investment. Sage, a market leader in cloud business management solutions, has created a free, downloadable small business toolkit that includes a business plan template.
Writing a business plan is just as much of a beneficial exercise for you as it is for potential investors. Firstly, it helps grant and loan providers see that your business is viable. Secondly, in writing the predictions, drilling down into the level of detail required and writing the justification behind them, you may think harder about the future of your business and make more concrete plans based on this.
A business plan template, therefore, helps you provide the right information to questions that need to be answered to gain interest from the right people and subsequent investment.
What a business plan should include
At its most basic level, a business plan should include the sections and contents that we cover below. All of them appear in Sage’s business plan template, which features helpful hints on how to fill out each part. (This is by no means a comprehensive list but it will give you a good idea of the level of information required.)
Structures and resources
- Organisational structure – the number of employees, the management team and the founders
- Staff (if you have any) – who they are, what their role is and what they bring to the table
- The product or service you’re offering
- It’s pricing and how you’ve reached this number
- Distribution – how will you get your products to customers?
- Growth – how will you increase business sustainably, and why are you sure this will work?
- Assets – the premises, equipment and technology you’re using
- Risk management – the biggest risks your business could face and how much this could potentially cost the business
Market analysis and opportunities
- Customers – their demographics, spending habits and how you’ll acquire new customers
- Competitors – who they are and how they match up to your business
- A SWOT (stands for strengths, weaknesses, opportunities and threats) analysis
- Marketing, advertising and promotion – how and where you’ll advertise, what your messaging will be and how much this will cost your business
- Current financial position – how has your business been performing so far
- Forecast – what are the predictions for the next five years and how are you justifying your assumptions
How to write a business plan
The best advice for writing a business plan is to take your time doing it, but there are some other considerations when filling out your template:
- Be as detailed as possible – the more detailed you are, the fewer questions funders will have about your business. If you’re not detailed enough, investors may feel as though you don’t know the answers and may lose belief in you, which could spur them to turn their attention elsewhere.
- Look at the plan from the point of the investor – doing so will help you understand what they’re expecting to see and therefore foresee any questions they may have.
- Do your research – an understanding of the climate will validate your product based on what’s currently doing well, allows you to size up the competition and is imperative for your financial forecast.
- Learn the lingo – the world of business encompasses a lot of jargon. You’ll need to be acquainted with the vocabulary to answer what’s needed in the best way. The business plan template from Sage includes a glossary of the most common words and phrases used in business, their definitions and how to answer each one concerning your brand.
The small business toolkit from Sage also includes a cash flow forecast template and an e-book about starting a small business. With these three documents in hand, you’ll increase your chances of creating and running a successful business.
Stacey McIntosh is the editor of Sage Advice UK and Sage Advice Ireland. He has more than 15 years of editorial, PR and social media experience, and has worked across print and online for national newspapers, magazines, PR and marketing agencies.