You wake up one morning with a business idea. The more you think about it, the more you’re sure it’s going to work. You are excited and you want to get going but something gets you thinking: “is having a good idea enough to create a successful business?”. The answer is no. You need to create an impactful business plan first.
Creating a solid business plan is an essential step to turn your idea into a business. Thinking things through is crucial if you want to maximise your chances of success.
Things to consider when creating a business plan.
There’s so much to take into consideration when creating your business plan. and you’ll surely find that some sections are easier to fill in than others. You’ll end up having a million answers to one question and no answers at all to others but no matter what, don’t give up – carry on building your plan! It’s not the final result that matters, but the process that takes you there. Sure, everyone wants a brilliant plan…however, an okay plan still works and…it’s better than having no plan at all!
There’s loads of literature around business planning. When setting up Saltoria Marketing, we did extensive research on the subject and read tons of blogs, listicles and e-books. To be completely honest, we learned a lot but we did find all the info a tad overwhelming too!
If you’re ready to turn your idea into a business, then here’s a little help from us! We’ve compiled a simple – yet comprehensive guide – on how to create your first business plan. Need a template to start? We really like Enterprise Nation’s – it’s free!
Step 1: What are you going to sell? (Products and/or services).
First things first, start by describing your product/service in detail. You may find this section unnecessary but the reality is that many people won’t be familiar with what you are selling, and what seems obvious to you may be completely new to someone else. So, grab a pencil and try answering these questions in detail:
- What are you selling?
- What is your key offering?
- How are you creating value for the customer?
- What makes your product/service unique?
- What positive/negative impact could you have on your community/society?
- How can you remove/reduce any negative impact your business may have?
Step 2: What’s your business identity?
It’s time to think about your long-term vision. In this section of the business plan, you have to describe the essence of your business, the benefits of your business offer and how your product/service meets your customers’ needs.
- Vision: What is it that you’d like to accomplish?
- Mission: What will you do to achieve your vision? For whom?
- Purpose: Why does your business exist?
- Values: Can you think about 3-5 words to describe your business ethos? This is what you are promising to stand for for as long as your business exists., so think about it carefully, as you can’t get this wrong!
- Value proposition: Can you describe your business in a sentence? The effort is to summarise the benefits of your offer and why a customer should purchase it in a few words.
- Name: What’s your business name and why?
Step 3: Who are you targeting?
It’s time to describe the customer that will buy your product/service. You need to find detailed information about your target audience and you need it to be specific (i.e. you need info about people in your local area and not around the world).
- Are you targeting businesses or consumers?
- Who’s your typical customer? Where are they based?
- Why should they buy your product/service i.e. what need do you satisfy?
- What do you think would make your customer choose between your business or another i.e. convenience, quality, etc.?
- Think about your custmers: what are their pain points?
- What’s your brand personality?
Step 4: Who are you competing against?
Businesses normally have many competitors. Try to focus on those which your customers are more likely to buy from and create a list of 5 competitors and answer questions such as:
- Who and where are they?
- What do they sell and how much does it cost?
- How big are they and what are their strengths and weaknesses?
- What measures can you take to deter competitors from copying you?
- What measures can you take to stay ahead of your competitors?
Step 5: What’s your business strategy?
Having a strategy in place is essential to achieve your business objectives. Take your time to think about and action the points listed below.
- Objectives: Think about your business objectives in the short, medium and long-term. What are you aiming to achieve in 1 year? And in 4-5 years? What about 10 years time? Are you giving yourself feasible and measurable goals?
- Keeping track of your progress: How do you assess progress? Could you phase objectives and achievements?
- Market research: The truth is that you can’t assume that your assumptions about your business are right, so you need to go out there and research your market before making a start. You should get the answers to these and many more questions: does your product/service sell in the geographical area you’re looking to target? How are other businesses doing? How big is the market and with how many businesses do you have to compete? What do customers expect from providers like you? What are the real needs of your target audience? Will your product/service satisfy them?
- SWOT Analysis: Are there any potential problems or threats in achieving your objectives? Think big, per macro categories – for example: economy, society, technology, legislation, politics, environment, etc. – are there any factors that are likely to change and have an impact on your business (e.g. Brexit, Covid, GDPR, etc.)? What can you do to respond to these potential changes? A SWOT analysis can help you identify the Strenghts, Weaknesses, Opportunities and Threats of your business. Think about 5 elements for each section, at least.
- Do you have a contingency plan? Think about a plan B, in case things were to go wrong…
Step 6: What’s your marketing strategy?
Now that you know who your customers are and what they need, it’s time to think about how to best reach out to them. This is a fundamental step when you create your business plan and it’s important to get it right. If you need help identifying your key messaging or planning a strong go-to-market strategy, we’re here to help. You can book a free consultation with us to discuss any of the points below.
- How will you let potential customers know what your business does? What message will you use? How will you encourage them to tell other people?
- What marketing activities will you carry out? With what frequency and for how long? Who will be responsible for these?
- What advertising channels will you use and how much will it cost you? What marketing materials will you produce (i.e. leaflets, presentations) and what info will you include? Who’ll design and print them? How will you distribute them?
- Will you reach out to people directly to tell them about your business (i.e. via phone, LinkedIn, email, letter, etc.)? If so, how will you find your potential clients? How will you engage with them?
- Are you planning to feature your business on social media? If so, on what platforms? What are you planning to achieve from this channel and how will you engage with potential/existing clients? You must grant consistency between your social media accounts and your website – do you know how? How often will you post and what?
- How are you planning to structure your website? What info should it contain? What functionalities do you need (e.g. e-commerce?)? Who’ll create it for you and how much will it cost? Can you maintain it yourself?
Step 7: What about operations and logistics?
Let’s move on to when and how you’re going to operate your business. There are many things to consider in this section, including the risks involved in operating your business and how you can manage these responsibly.
Think about the legal requirements
- Which legal structure are you planning to give to your business (e.g. Limited Company)? Does your business need to be part of a particular training body or adhere to certain quality standards?
- What legal requirements apply to your business (e.g. registering to your Council or to HMRC for VAT)? Do you need a trading licence? Do you need a shareholders agreement to iron out the relationship with your business partners? Where will you go for legal advice?
- What type of insurance do you need to protect your business and your clients i.e. Public Liability, Cyber Crime, Employer’s Liability, Contents, etc. Research the type of insurance you need and make sure you compare at least two quotes.
Think about other important, operational matters
- Will you run the business on your own or with a business partner(s)? Will you hire some staff? If so, what support do you need and what will these people do?
- When are you going to launch your business?
- How will you produce your product or deliver your service? Do you know how much time will it take? Have you thought about delivering costs?
- How will you get paid (credit card, bank transfer, etc.)? Will your customers pay upfront or will they pay a deposit and the rest at completion? Who will do your bookkeeping?
- Will you have any suppliers? How will you choose them? How will you pay them?
- Where will you run your business from? If you’re working from home, do you have permission from your landlord/local authority? If you’re renting an office, what’s the best type of contract? What premises do you need? Is it convenient for your customers?
- What equipment do you need? How much will it cost?
Step 8: What’s your cost and pricing strategy?
It goes without saying that the price of your product or service must be higher than it costs. So, before deciding at what price you’ll sell the fruit of your work, you should work out how much it will cost you to make it and deliver it. Not only this, the price of your product should also cover the costs of running your business (rent, bills, equipment, etc.), your labour force and your personal survival budget.
- Can you work out the cost of your product/service? If not, can you work out the cost of a batch (e.g. a batch of 10 glasses)?
- Can you break down the cost of your product/service into parts e.g. materials, packaging, labels? If so, add up the costs of each individual part to work out the total cost.
- What price will cover these costs and give you a decent profit? Is the price in line with your competitors? If not, will your customers be inclined to pay more/less and buy from you?
Step 9: How much money will you make?
Yep, a financial forecast is essential to understand how much you’ll pay to make and sell your product/service and how much you think you’ll earn in the first year. It’s hard to know how much you’ll sell, especially at the beginning. Our suggestion is to look at the worst case scenario, always!
- Can you calculate your sales? Write down the name of the months starting from the month you’ll start trading (month 1). Write down how many sales you’re planning to make each month and multiply that for their price. The total income is your turnover (remember this is different to profit!).
- Can you calculate your start-up and running costs? Calculate how much capital you’ll invest in your business and how much money you’ll spend each month to meet your predicted sales. Try to take into account external and unpredicted factors e.g. seasonality.
- Can you calculate your personal survival budget? It’s the amount of money you need each month to cover your personal experiences. It’s what you need to live on! How do you calculate it? List your monthly expenses – some of these are easy to predict (e.g. rent, subscriptions, bills, insurance, etc.), some others may vary (e.g. entertainment, clothing, food, etc.). For the items that vary, you should work out an average cost (remember to keep your business expenses out from this calculation). Add up all your costs to get your total monthly costs. List your monthly income, including income from a part-time job, benefits or investments and add them up to get your total monthly income. To work out how much income you require from your business, take away your total monthly income from your total monthly costs.
Step 10: What are your quick pitches?
Interestingly enough, this section should sit at the very beginning of your business plan but it’s the last bit you should compile. Think about the points you’ve listed so far, pick the essentials and…
- Charm the reader with a concise and engaging executive summary. Think about this as the most important bit of the whole business plan. In this section, you must explain the basics of your business and list the key essential points of your plan (e.g. your business proposition, your plan to generate income, the added value of your product/service, your financial projection, etc.).
- Think about a quick and persuasive way to pitch your business to a potential investor or client. This is the so-called elevator pitch. How can you describe your business in 2 minutes and ensure you make an impression? Tone of voice is extremely important here + make sure to say what your business does, who it is for and why it is different.
If you enjoyed this article on how to create an impactful business plan, then you might also enjoy our recent blog; ‘What we learnt about starting up our own business (and what not to do!)’ – which is jam-packed with tips and learnings about starting up on your own.
What next? We’re here for you! Are you stuck in a rut? Do you need some inspiration? Do you need a bit of organisation? Remember – you can book a free consultation with Saltoria anytime.