BUSS1.4 Developing Business Plans Starting a Business Developing Business Plans “Goal setting starts with a pad of paper, a pen and you." Gary Ryan Blair "There are no secrets to success. It is the result of preparation, hard work, and learning from failure." Colin Powell "In life, as in chess, forethought wins." Charles Buxton "People with goals succeed because they know where they are going... It's as simple as that." Earl Nightingale "When defeat comes, accept it as a signal that your plans are not sound. Rebuild those plans and set sail once more toward your coveted goal." Napoleon Hill

BUSS1.4 Developing Business Plans In this topic you will learn about  The purpose and contents of business plans  Sources of information and guidance

BUSS1.4 Developing Business Plans The purpose and contents of business plans What is a Business Plan? According to Business Link: ‘A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts. It has many functions, from securing external funding to measuring success within your business.’ To look at over 100 free Business Plans for start-up businesses look at: A Business Plan is a living, breathing document that will change and grow as your business grows. It will be used both internally, for your own use, and externally, by banks, external investors or those willing to provide grants.

BUSS1.4 Developing Business Plans The purpose and contents of business plans What is the purpose of a Business Plan?  To secure external funding for your business banks, potential partners, venture capitalists, business angels  To ensure that the firm develops a healthy financial structure  To help identify problem areas that the business might face  As a focus to set targets and check on the firms development  To provide realistic expectations of what can be achieved specific, measurable, achievable, realistic and time-based (SMART)

BUSS1.4 Developing Business Plans What are the contents of a Business Plan? How will the business be developed? When will this take place? Who will be the main protagonists? How will the finance of the business be maintained? 1. The Executive Summary The most important part of the Business Plan. This provides a synopsis of the entire plan looking at the most important points. Often an external agent such as a bank will not go further than reading the executive summary. If the summary does not make the business sound worthwhile then the Bank Manager may not read on. Venture Capitalists and other external investors will often be put off a business start-up if it is not clearly explained and fails to capture their imagination.

BUSS1.4 Developing Business Plans What are the contents of a Business Plan? 2. Your business and its product or service The Business - start-up date - legal structure - history - business sector e.g. retailing The Product/Service - how is it differentiated? - why will it sell? - do you have a copyright, trademark or patent? - how will you develop your product? 3. The Market Market size and growth Competitors and how you can take market share off them or attract custom in a growing market Target market – is it a niche or mass audience?

BUSS1.4 Developing Business Plans What are the contents of a Business Plan? 4. Marketing Strategy and Sales The marketing mix - price, product, promotion, place Sales methods 5. Skills of the entrepreneurs What skills and experience do you and your team possess. How will you motivate, train and recruit a workforce? 6. Operations Location Production facilities Management information systems Information Technology (IT)

BUSS1.4 Developing Business Plans What are the contents of a Business Plan? 7. Financial Forecasts Cash flow forecast Forecast profit and loss Sales forecast Finally, it is important that the plan is well presented. Whilst a good looking business plan does not make it a good plan at least external people such as the bank manager will look at it. A poorly presented business plan might be overlooked straight away.

BUSS1.4 Developing Business Plans What are the contents of a Business Plan? For more information on Business Planning have a look at the help sheets produced by Startups: 10 things to do before writing a business plan Common business plan mistakes Read how an up to date business plan helped Darren Jones save his business - AKC Home Support services

BUSS1.4 Developing Business Plans Sources of information and guidance There are a variety of sources of information for those looking to start their own business: 1. Small Business Advisors 2. Accountants 3. Bank Managers 4. Government Agencies Creating a business plan – also discusses sources of support Run video clips from internet

BUSS1.4 Developing Business Plans Sources of information and guidance Small Business Advisors There are a range of small business advisors available to help businesses start-ups. Some business advice is free but often you will have to pay for specialist advice. This advice could be crucial if a business start-up is to avoid the pitfalls associated with setting up a new business. ‘Adviser Locator’ offers help in finding an advisor on a range of issues in your area. This has been set up by the Institute of Business Advisers (IBA):

BUSS1.4 Developing Business Plans Sources of information and guidance Accountants A good accountant is essential for a small business and advice from accountants at start-up can be invaluable. Your accountant can save you both time and money, but it is important that you choose the right one: 1. Word of mouth – friends and family 2. Are they suitably qualified with an approved accountancy body? 3. How many similar businesses do they look after? 4. How much do they cost? Look at the following professional bodies for information:

BUSS1.4 Developing Business Plans Sources of information and guidance Bank Managers A good bank manager is vitally important for a small business. A small business will meet with the bank manager on a regular basis and the bank is the most likely source of funding for the business. Therefore, it is important that the business can build a good relationship with the bank and can trust the bank manager. Below are just some of the business banking sites available for small businesses

BUSS1.4 Developing Business Plans Sources of information and guidance Government Agencies Business Link is an excellent organisation providing support for start-up businesses: Companies House provides information about how to set up a limited company: The Department for Business Enterprise and Regulatory Reform (BERR) is the voice for business across government:

BUSS1.4 Developing Business Plans Sources of information and guidance Other Agencies The British Chambers of Commerce provides useful support for small businesses: Startups is an excellent site providing free advise for new businesses: Everything the small business needs to know can be found at: The Federation of Small Businesses provides useful advice: Businesses working from home:

Activities  Individually write down your top ten tips for writing a business plan  Collect all of the different tips from the class together  From all of the tips agree on just ten  Produce a brochure with these top ten tips and under each one briefly explain why it is so important  Visit select 1 business plan and from this writewww.bplans.co.uk a 1 minute sales pitch that could be used in front of a dragon or bank manager 5 questions you would ask the entrepreneur if they approached you for finance 2 pieces of advice you would give the entrepreneur if they approached you as a business advisor