The Business Plan

Every business should have a business plan and is essential when starting up. It is a written document that describes the business, it’s objectives, it’s strategies, the market it is in and it’s financial forecasts. It has many functions, from being able to see what the business is and where it is going, to securing external funds if required and to measuring the success of the business. It is a statement of intent and should provide details of how the business is going to develop, when it is going to be done and by whom and how the money will be managed. Having this document from the beginning will allow focus and the best chance of success.

It helps you to define your goals and strategies, it will be changed and updated on a regular basis, but it will help you, to keep things in perspective. You can then refer back to it when things become confusing or complicated. It allows you to develop a professional attitude to your business, which not only helps you to increase your earnings, but also help you to finance your business.

Everyone’s business plan will be different, as objectives will be different, but there are certain common factors that make up a business plan which will help your business grow.

Some tips on putting a plan together. Keep it short, producing a plan the size of a manual will not get read. Think about presentation and keep it professional although it doesn’t have to be costly, it is merely giving an impression of the business and is a functioning document that will be used. Writing skills required, limit the use of jargon, ensure it is legible, a typed or word processed copy is best, edit it carefully get a least two different people to read it and check it makes sense, and avoid putting important information like market research data or balance sheets in appendices, keep it within the body of the text. Finally make sure it is realistic.

It should include:

An overview of the business or sometimes called the executive summary. This will identify such items as

Your business name, or your own
Details of the proposed location of the business
A copy of your logo
Details of your copyright notices
What form your proposed business will take i.e. sole ownership, partnership, Limited Liability Company or Corporation.

Short descriptions of the type of business, what is going to be sold/services you are going to offer and who to. Here you should also include any future gaols or avenues you would like to explore, stating your clear objectives. This is so you can check at a later date whether your objectives are on course, or if you have got sidetracked.

Markets and competitors – Here you should be able to demonstrate who your customers will be, as well as where your market will be, as in wholesale or retail or a combination of both. Clearly define your opposition, as well as their strengths and weaknesses. This should include ways you may be able to exploit any gaps in the market.

Marketing and sales strategies, why will people buy what is being sold.

The marketing section within a business plan should be in overview. To fully exploit all the marketing opportunities available to you now and in the future you should do a more detailed Marketing Plan.

Details of the management team together with any skills and experience they have

How it is to operate including premises, facilities, management information systems and IT requirements

Financial Forecasts, including, profit and loss and sales forecasts, but more importantly cashflow and budgeting forecasts, these alone will determine how you see where you money is coming from and going. They are important and essential tools for every business and should not be overlooked, they will determine how well your business functions, it’s future and the amount of profit you will make.

This Financial Forecast should cover:

How you intend to manage the day-to-day bills of the business.
How you intend to price your services, and what factors influence this pricing structure, which should include a section on your competitor’s financial structures. A fair amount of detective work is required here, one tactic is to get your family or friends to ask for quotes from the local competition. You should try to be on top of your competitor’s prices, to undercut an existing photographer is one choice, but to neglect to value your skills and not charge enough to cover your overheads is another matter entirely.
Make a list of the equipment you think you will need in your first year, as well as how and where you intend to purchase it from.
Explain any difficulties that may arise in obtaining your supplies.
Whether the prices of your supplies have a seasonal fluctuation that may influence you when to buy.
Any local licenses that will be necessary
How it will affect others around you, for instance if you are intending to work from home your neighbours may not be thrilled at a procession of customer’s to your door, check whether they can restrict your services.
Make a study of all your business insurance requirements.
How you intend to finance the growth of your business, as well as isolating what your financial needs will be. This should be assessed on a monthly basis for the first year and on an annual basis beyond. You should include, a projection of your future earnings, and an accurate assessment of your outgoings.

An important aspect of the financial statement is an assessment of the break-even point of your business, in other words the minimum you will have to take to pay your expenses.