Step 1 - Explain your business idea
What are you going to sell or provide? Who will it help? What problem will it solve?
Example: I will provide car cleaning and valeting at customers homes or work places. This will allow local residents to get their vehicle cleaned without travelling, and taking time in their day.
Output: a short description of your business.
Step 2 - Understand your customers and competitors
Who might buy from you? What do they need? Who else provides something similar, and what could make your business different?
Explain the customer target group you are aiming the business at, for example, busy mums, business people who cant leave the office when working. Who are your competitors? Search for any one else in the local area offering the same service, but explain why your business if different, and better.
Output: evidence that people may want what you offer.
Step 3 - Work out how customers will find you
Consider word of mouth, social media, local networking, referrals, a website or other ways to reach your audience.
Output: a realistic plan to attract your first customers.
Step 4 - Plan how the business will operate
What equipment, premises, training, licences, insurance, suppliers or staff will you need? Can you start small?
This area may take a little longer to write. It needs to describe what you will to get started, or grow.
Consider:
- Where will the equipment be purchased from?
- If you are buying or renting a premises, do you have the property information?
- Will you need any additional staff?
- What does the daily operation look like?
Output: a practical plan for running the business.
Step 5 - Understand your finances
Estimate what it costs to get started, what you will charge, how much you might sell and what money you need to live on while the business grows.
Consider:
- How much will the new equipment cost?
- How much does the premises (if needed) cost?
- How much is the insurance?
At this stage these can be quotes, but they allow an insight into the running costs of the business.
This information will create your sales assumptions, and cash flow forecast. Be realistic with your first few trading months, and build upward.
NOTE: If your income is coming straight from the business from day one, work out how much your current 'Personal survival budget' is. This is the minimum amount required to pay your bills (mortgage, electric/gas, phone etc) plus groceries/fuel costs.
Output: startup costs, sales estimates and a monthly cash flow forecast.
Step 6 - Identify risks and plan for challenges
What could go wrong? What would happen if sales were slower than expected, a customer paid late or equipment broke?
Example: If you are waiting for a customer to pay an invoice, and they are late, will you still be able to make your rent/equipment/loan repayments? How would you deal with this? Is there a temporary fall back plan?
Output: a realistic plan for handling setbacks.
Step 7 - Bring it all together
Now you have all the information, write a short paragraph to summarise the idea, your customers, how you'll operate, your financial expectations and what you need to get started.
This will be your 'Executive summary', and will be placed first in the document you have created. It is the first piece a lender or investor will read, and an introduction to you and your business.
Output: a complete business plan ready to review and adapt for your purpose.