If you have ever wondered how to write a business plan for a small business, then you have come to the right place. The place to start is determining in your own mind, why you need a plan at all. OK, so you’ve got a great idea for a business. You have approached someone for support, emotionally or financially and you have been asked to write a plan. Or maybe you just want to get it clear in your mind, what you are going to do will work.
The first thing to do is outline your idea. What you are going to do, who you are going to do it for, how much you are going to get paid to do it, what your costs will be and how much you will make out of it. So write a quick overview of the idea.
Next, you need to state your skills for the job. What you have done before that relates to this business, how you got to this point and why you think you will be good at it. If you are going in with a partner or partners include their relevant backgrounds too.
Then write a description of where you are going to operate from. This is critical because business is about building momentum and maintaining it. Along the way you will have long term customers and short term customers. They will join you and leave you. You need a clear picture of how you are going to increase and maintain a customer base. If you are going to have a highly visible premises where you can tap into passing trade, you need to state how many people are passing, approximately, why the location is good, what sort of attention you can get and even maybe some of the offers you can make to lure customers through the door. A useful tool is if you can show some comparisons of competitors offers which seem to work. You will need to put your own “slant” on these offers as its not a good idea to copy your competitors exactly.
Now the hard part. Write a list of your expenses. Then your expected income. Do it month by month for the first 12 month period. You will know what your rent will be, likewise staff costs and raw materials. You will know how much you will want to take out of the business so include this. Factor in any sales tax or GST to give you a total sales figure you need to achieve. Now thinkabout sales patterns. December is a great month for most businesses and January a poor one. Add to this the fact you will be starting from zero. Month one may be slow and build up from there. Are you selling for cash and buying on credit or buying for cash and selling on credit. You will need to be sure you will have enough money (overdraft) ready to cover the “cashflow” of the business.
If you need machinery or a “fitout” of the premises, allow for this cost in your starting capital. If you plan to get to a certain level of profit and stay there forever then your initial cash plan will cover it. However, if you want to grow your business continually you will need more cash. Some idea of how that could be added would also help to reassure the parties of the businesses future. Maybe you can borrow against your house, maybe you are due for an inheritance, maybe a relative or friend has expressed interest in participating when the business gets to a certain level. Either way, some idea of how growth will be funded will be useful at this stage.
So I hope this has helped you in, how to write a business plan for a small business. Its a good idea to talk to your accountant and bank manager during this process, also anybody who has business experience and is positive. Beware of the naysayers, its easy to do nothing or advise others to do nothing. Without the visionaries of this world no progress would ever be made.