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BUSINESS PLAN SEQUENCE AND CONTENT

By Rick Moore,2014-07-09 09:20
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BUSINESS PLAN SEQUENCE AND CONTENT ...

    BUSINESS PLAN SEQUENCE AND CONTENT

    At ACT we firmly believe that whilst the actual document which comprises the formal Plan may vary considerably in terms of content and complexity (according to the proposition being described) there is a clear and logical sequence to the process of planning. This Guide presents the key stages

    and the potential content that should be explored every single time. The list of Additional Topics which is appended may be integral but can be

    introduced at appropriate points through the model sequence.

PERSONAL OBJECTIVES

     What do you want for you? Can be material, life-style, developmental, whatever.

    (May include things that are not wanted.) May be short and long-term.

    What is it about you your experience, skills, knowledge etc. that you seek to exploit?

    What is your regular monthly income requirement?

    Mention any specific help or support available that you intend to use.

BUSINESS DESCRIPTION

    An overview of what you intend to do. Ideally, listed as separate strands or multi-markets. May be what you will do and how you will do it.

    Clarify if short and long-term intentions are to be covered equally within the Plan.

    Identify strands to enable cross-reference in later sections eg. A, B, C etc.

    Describe status of business location territory of operation, related to strands.

    Mention if any possibility of other supporting work in the short-term.

    Will anyone else be involved? If so, on what basis?

Will there be any costs involved in this section?

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MARKETS AND CUSTOMERS

    Describe, in as much detail as possible, both the market for each strand and who you see as your potential customers. Explain how you have identified these needs. Mention any specific trends or cycles that may be involved. Are there any seasonal or trade practice considerations that will be involved? How will you sell?

COMPETITION

     From who else, or from where else, could your potential customers buy? Give as much detail as possible for each strand. Consider and identify both

    direct and indirect competition presenting (objectively) the strengths and weaknesses of each. Consider both what is done and how it is done.

    Describe any research conducted by yourself.

YOUR STRENGTHS

    2 2

     Explain why (for each strand) you believe you can achieve market share by what you will do or how you will do it.

    These reasons must be clear and unambiguous, clearly related to proven market and customer needs identified in earlier sections. Do they stand up in comparison with your competition? (Check back to their strengths/weaknesses.)

    What (communicable) benefit(s) that you provide will give you an edge?

ADVERTISING AND PROMOTION

How will your markets/customers know you exist and what you can do for them? Separate into free, low-cost and purchased methods for each strand.

    Prioritise (use Pairs Comparison) for initial start-up and continuing strategies.

    Explain how other elements of your Business Image will support and consistently sustain the messages you wish to put across. Describe in detail your budget in this section to establish your business.

    (Ensure everything in this section relates to the needs/benefits described earlier.)

SALES FORECAST

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    For presentational purposes this section may be placed here in the Plan, or prior to Start-up Finance later.

     For a completely new business the only way that this section can be completed is normally by using The Up-side Down Sales Forecast method. The intention is to set realistic targets of sales to be achieved allowing for projected “non-earning” times. These should be presented as products sold, hours billed, days worked, projects undertaken, customer numbers etc. explaining the pricing policies

    adopted - and the reasoning behind any estimated income from a mix of strands, where that is applicable.

    Wherever positioned within the Plan, this section can only usually be finalised at the end when all start-up and operational costs have been identified.

    THE FIRST SECTIONS OF THE PLAN CAN BE SUMMARISED AS:

    What do you want for you?

    So what are you going to do?

    But is there a market and customers for that?

    If so, who or what else is meeting those needs now?

    Then why will you get any share of those markets?

    But how will you get that across?

    If all that makes sense, how will you know it is all working?

SUPPLIERS

     Describe who will be your principal suppliers and why. This can embrace stock, tools, materials, stationery, consumables, whatever.

    Detail any special terms, conditions, supply agreements, credit terms that may be applied.

    Also remember that you will also purchase services banking, perhaps legal, accounting, book-keeping. Include these in the same way within this

    section.

    It is also appropriate to include subscriptions here if they are your personal up-dating.

    If any up-front costs are involved, give details and your budget for this section.

LEGAL AND INSURANCE

    4 4

     a) Explain your own terms and conditions of trade.

    b) Demonstrate your awareness of the principal legislation and regulation that will apply to your self and your business activities. Relate to

    strands as appropriate. Specify any licences that may be required.

    c) Explain the insurance arrangements that you will have in place. Also explain your reasoning and priorities if you envisage short-term and

    longer-term provisions. Also identify the supplier of these services.

    Detail any costs implied and specify the budget you allocate to this section.

EQUIPMENT

    a) List everything that you own and could use in the business but have no receipts. This list and the values you put to it should be referred to

    under this heading but are not essential to the Plan presentation if included, the detail may be an Appendix.

    b) Make a list of everything you may use in the business but for which you have receipts. Again, can be referred to in this section but detailed

    as an Appendix.

    c) List and cost everything that you need (that is essential) to start-up the business.

    The third list above constitutes your budget which is allocated to this section.

    YOU CAN NOW COMPLETE THE FINAL SECTIONS!

START-UP FINANCE

    5 5

If all the previous Plan Sections have been completed, the various budget figures given will establish what will be required.

    Add together any requirements for:

    Formulating the business (eg. Limited Company, Franchise, etc.) Advertising and Promotion for start-up Stationery and other consumables. Legal, Insurance, Licence costs.

    Essential Equipment and any starting stock If applicable, Premises (entry and fitting-out costs)

Summarise your figures and explain where the money will come from.

    With all costs known it should now be possible to produce an Upside Down Forecast which could include any finance repayments. It will also act as an overall check of the Plan in full and indicate if any fine tuning is required. (You can also factor in any repayment to yourself of pre-start and

    other expenses which you may have paid out of your own pocket in setting up the business!)

FINANCIAL PROJECTIONS

     It is now possible to produce a Cash Flow Forecast essential if the business proposition entails any significant fixed costs and also to establish any short term borrowing or overdraft requirement. Pay particular attention to the impact of any credit terms which you may be offering or taking, and be realistic about the time that may be taken by customers in settling issued invoices!

APPENDICES

     Place here any detail which will evidence your preparation and support the Plan as a whole. Typically that could include:

    CV detail; Market, Customer and Competitor Research methods and findings; Price Lists; Advertising and Promotion examples; Terms and Conditions; Equipment Lists, etc.

    Always Remember The Planning Process checks that your business can give you what you want for you………..

    The Business Plan is evidence that you have covered everything!

    ADDITIONAL TOPICS

     This Guide to sequence and content is focussed upon helping individuals to translate the process into an appropriate form of Business Plan particularly at a self-employment level. It is not intended to represent a comprehensive business course; nor to prescribe and proscribe other considerations which may be raised along the way! Some topics which will inevitably arise at appropriate times are:

    How you get paid types of business and their implications Balance Sheet for the state of play especially creditors/debtors Tax, National Insurance and VAT. Personal drawings. Contribution /Breakeven - beginning to earn for oneself. Separating (and paying for) business and personal expenses Cash Flow Planning importance and management Pre-start expenses; office at home; business travel Developing a policy for pricing. Dangers of discounting. The special demands and disciplines of home-working The value of the Up-side Down Sales Forecast Research methods (Market, Customer, Competitor) and Information Negotiating effective supply arrangements goods and services Sources Whether or not to use (and how to employ) an accountant Strengths, Weaknesses, Opportunities and Threats Managing the Bank relationships in terms of customer and supplier Needs/Benefits/Features and basic Selling Principles Making use of what you already own in setting up a business Invoicing and payment arrangement checklists The importance of personal updating and networking Customer-based approaches to advertising and promotion How to use an Insurance Broker and make proper provision Prioritised budgeting strategies use of Pairs Comparison Sources of finance and how to approach them Adding Value and increasing Cost Of Entry Use of time and managing self. Pitfalls and good practice. Book-keeping for historical records Failure- and what if it all starts going wrong. Profit and Loss for the final score. Allowances/depreciation- comparisons

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