A-Z OF STARTING YOUR OWN BUSINESS: THE BUSINESS PLAN

Business planning is the core focus in this fifth issue of our ten part series for start-up businesses.

We guide you through the initial stages of creating, structuring and developing your business plan.

GEARING UP!

A well planned and structured business plan is the chief foundation for future business success. Irish Entrepreneur takes a look at business planning.

Faced with the thought of having to compile a lengthy business plan document, an outward expression of your inner business vision may seem like a daunting one at first. However, for
a business to succeed the critical two year phase, whatever the sector, business planning is vital.

Through the physical medium of a business plan, start-up entrepreneurs must research the viability of their product and service, communicate their vision into realistic targets, cover all of the financial facets and ultimately discern whether their business has true market accessibility and long term potential.

It takes time to plan and research all of the criteria necessary for a business plan. However, a well formulated plan will clarify, firstly to yourself and then to external agencies and organisations, that you are dedicated, prepared and informed of all of the key issues to transform you business dream into a workable reality.

Finance and Budgeting

Getting your financial projections in order takes time. Consider the following:

Set out your cashflow projections. Identify operational costs and whether you will need to buy equipment, pay rent and ascertain the number of staff you will employ. Establish how much start-up finance you will need. Identify the entities you will approach for start-up capital. Do up a balance sheet. Forecast projected income and expenditure and expected profits. Analyse and be aware of any deviations that may occur..

FIRM FOUNDATION

Akin to a check up, a business plan covers a multitude of start-up affairs, from researching the potential of the business in terms of competition and its long term potential, from objectively analysing whether the business product or service will fill a market gap to whether you will be able to cover all of the initial financing to get the business up and running. In the initial draft of your business plan, it will help you decipher how much capital your start-up will require and the type of entities you will approach for loans or grants.

By getting your business goals down on paper, a business plan becomes an essential tool that sells your entrepreneurial vision and aspirations to external entities, including financial institutions, venture capitalists, enterprise boards or, if your business has high knowledge growth potential, to entities such as Enterprise Ireland.

DELIVERING THE GOODS

Firstly though, you have to sell the business plan to yourself and then to an individual or group, such as a friend or accountant, who will give you their objective view on your business plan. Through taking the time to research your business and its key markets and by identifying financial and cash flow projections, you will then be in a strong position to take an objective view and write down your plan in a clear and objective format. In other words, if a business plan comes across as well thought out and covers all of the necessary aspects, this will be instantly transparent to the external reader.

Therefore, it is fundamental that the entrepreneur maintains full control over their business plan as this conviction will always shine through.

FULL CONVICTION

In general then, people are encouraged to write their own business plans. However, there are many entities and individuals who can help with key areas of your plan. It can be worth sourcing a mentor or a consul-tant who can offer a bird’s eye analysis of your plan and objectively discern whether the focus needs to alter slightly or diverge from its original proposal.

RIPPLE EFFECT

When you progress to pitch entities for financial advice, loans or grants, your business plan is the main tool for a financial proposal. In terms of accessing funding, a business plan is crucial when making loan applications. The plan should contain clear information about your company and how you intend on repaying borrowed money. In addition, a business plan is a marketing device that will promote your business to the relevant parties.

It’s worth spending the time on researching, planning and writing your business plan from the start. And by covering all aspects, the process of writing a business plan will help identify potential obstacles so that you can solve them from the outset and get on track.

THE PROCESS

Successful business plans generally pursue a set formula. There are variations but a good business plan will usually cover the following criteria: An Executive Summary Covers every aspect of what will follow in the plan. Sells your business and succinctly clarifies how your business idea came about. Identifies your business vision and goals. Contents Keep this short and clear. Misson Statement Short statement that communicates what your business will achieve. Business Objectives Clarifies your business projections for your first year in business. Explains what will set your business apart. Company Description Communicates your business product or service and establishes the industry it will serve. Market and Marketing Strategy Explains your market and customers, market targets and strategy and analyses any existing competition. Financial Projections and Breakdown Sets realistic cashflow objectives. Clarifies running and fixed costs. Estimates total yearly income and expenditure. Risks and Opportunities Identifies possible risks and clarifies how you will transform them into opportunities. Three to Five Year Plan It is essential to project what you want your business to achieve in three to five years. Shows you are committed and in it for the long haul. Management and Personnel Names key personnel. Identifies how many people you will employ and their salaries. Supporting Documents Attach appendices or documents that support your business.

VITAL CONTACTS: MICROFINANCE & BUSINESS PLANNING

MICROFINANCE

BELOW IS A LIST OF ENTITIES THAT CAN HELP WITH BUSINESS PLANNING

Business Innovation Centres (BICS)

City/County Enterprise Boards

Each enterprise board offers business planning advice to entrepreneurs starting out. Contact your local CEB for further information.

Enterprise Platform Programmes (EPP)

Each EPP provides an introduction to business planning.
Contact the following pertaining to your region: