The Business Plan


The Plan is for the Owner & Financial Backers

1. A business plan is an outline of what a new business will do, & how it aims to do it 

2. Creating a business plan forces the owner to think carefully about what the business is going to do & what resources are needed - allows them to calculate how much start-up capital is needed 

3. Plan can be used to convince financial backers that the business is a sound investment 

4. If the business is a bad idea, the planning should help the owner or financial backers realise this at an early stage - before they've wasted time & money on a business that wasn't going to work

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Most Plans Include 7 Sections

1. Personal Details - of the owner & other important personnel - like CVs. Investors will want to know who they're trusting w their money 

2. Mission statement  a way of describing broad aims of the compnay. 

3. Objectives - more specific than aims 

4. Produce description - including details of the market & competitors. Should explain how the fim will achieve product differentiation - USP. should also descirbe marketing strategy using 4P's. Statements should be supported by field or desk research 

5. Production details - how the firm will make its product or provide its service. Should list equipment needed & its location

6. Staffing requirements - what personnel will be needed - how many people, their job descriptions & expected wage bill 

7. Finance - should explain how much money is needed to start up the business. Cash flow forecast & projected profit & loss account & balace sheet

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Business Plan doesn't Guarantee Success

Starting a business involves many risks & uncertainties, some can't be controlled. These include:

  • the health of the economy
  • the actions of competitors. few businesses know what its competitors are planning - especially if new firms are planning to enter the market with innovative ideas. A successful business constantly monitors its plan & the factors which affect success 
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