Starting a new business is understandably an exciting and sometimes nerve-wracking experience. It helps to have a plan.
There are many things to consider when starting a new business for the very first time or launching a new venture. Alongside an understanding of the market and the competition you will be facing, you will also need to consider funding, personal expenses, staff and perhaps premises.
A business plan is the starting point and will help shape your next steps.
Business plans will take many forms and there are many online resources that can help you create your first plan. However, depending on the size and ambition for your new business, seeking professional help from your accountant can be invaluable, and even more so if external funding is needed.
Here are my four top tips for creating an impactful business plan.
Tip 1. Really understand your business idea
A good business plan will help you understand the business you are looking to create and build. It will help prove that you are serious about this business. You will want to consider the following:
- A clear definition of what the business is trying to achieve – in terms of any products you will sell or services you provide.
- An indication of the size and nature of the market, whether that is local, nationwide or international.
- The funding and resources you will need to get that business off the ground.
- The cash you will need to meet your day-to-day personal needs.
Try to be as critical as you possibly can.
Tip 2. Take time to understand the competition
Every business will have competition and it pays to take time to understand who your competitors are and how they go to market.
Look for the gaps in their offering, incremental improvements to products or services or the unique proposition you can bring, and articulate that in your business plan. It is helpful to revisit competitor analysis on a regular basis.
Tip 3: Staffing and premises
Staff and premises can represent a significant overhead for any business so it is vitally important to understand what you will need and when.
Depending on the nature of the business, it may be possible for staff to work from home for all or part of the week, saving considerable property costs. But you will need to consider the impact that will have on creating a strong culture and your ability to attract future talent.
If premises are needed, carefully consider exactly the space you need now against future growth plans. Whilst you will not want to over commit on day one, you may need to consider how future growth might be constrained by a limiting environment.
Tip 4. Funding
Whilst many small businesses may be initially funded by family and friends, businesses with ambitious growth plans will need often serious investment often delivered over multiple rounds. Investors will require a much greater picture of the business. A business plan for investors will, amongst other things, include:
- Details on the management team.
- Size and shape of the market.
- How the funding will be used.
- Key growth and financial milestones.
- How investors can exit.
Depending on the nature of the funding required, a separate financial plan may be needed, supported by your accountants.
Your accountant should be well-versed in creating business plans, both to help guide you in building a new business or in attracting investment.
As always, advice before taking action is recommended. Please get in touch with James Johnson on the details below if you would like to discuss anything related to the content of this article.