Creating a Business plan is a fundamental step in establishing a new business venture. It provides a roadmap for a business and is also crucial for securing investment. The suggested theory to include is provided in brackets, just go to the correct content area and click on the corresponding number to see the theory notes.
There are 6 sections to a business plan:
- 🌟✍️ Executive Summary
- 🕵️♂️🔎 Primary and Secondary Research
- 📊🌍 Market Analysis
- 🚀💡 Marketing
- 🧑🤝🧑👨💼 People and Operations
- 💹💵 Financial Plan
Remember for the exam:
Executive Summary
The executive summary is the first section of the business plan and should encapsulate the key points.
Key Elements:
- Company Name: Your business’s name.
- Product or Service Provided: Briefly describe what you are selling or the service you are providing.
- Reasons for Product or Service: Explain why there is a demand for what you’re offering (1.2.1 – 1.2.3 Aims and Objectives).
- Target Market: Specify who your potential customers are.
- Legal Structure: Whether the business is a sole proprietorship, partnership, or a limited company (1.3.1 Legal structures).
- Finance Required: Indicate the total capital needed to start and run the business (6.1 Business and enterprise funding).
Primary and Secondary Research (2.2.1-2 Primary & Secondary Research)
Research your competition and market to validate your business idea.
Key Elements:
- Competition: Who are your competitors? What are their products, prices, number and locations?
- Products and Prices: What is your competitive edge?
- Number and Location: Number of competitors and their geographical spread.
- Distribution Methods: How you and your competitors distribute products.
Target Market (2.1 The market, 2.1.1 Aspects of the market, 2.2.3-5 Data, Market and Orientation Types)
Understanding your target market is crucial for the success of your business.
Key Elements:
- Location: Where your target market resides.
- Characteristics: Demographics, psychographics, etc.
- Number: Estimated size of your target market.
Labour Needs
Your business’s labour requirements, including the skills, number of employees, and the costs involved.
Key Elements:
- Skills: Types of skills your employees must possess.
- Number of Employees: How many staff you’ll need.
- Cost: Estimated labour costs.
Example: Dyson requires engineers skilled in fluid dynamics for their vacuum technology.
Premises (2.3.2 Place)
The physical location of your business, including costs and equipment needed.
Key Elements:
- Location: Geographical location of your business.
- Cost: Expenses related to securing the premises.
- Equipment: Items needed for operations.
Raw Materials and/or Components
Information about the materials you need to produce your product or service.
Key Elements:
- Quantity: Amount of each material/component needed.
- Cost: Price per unit.
- Supplier: Where you will procure these materials.
Market Analysis
Detailed analysis of the market landscape.
Key Elements:
- Target Market: Who you plan to sell to (2.1 The market, 2.1.1 Aspects of the market).
- Competitive environment: Key players in the market (2.1.1 Aspects of the market).
- Potential Suppliers: Possible sources for your raw materials (7.1 The impact of the external environment).
Marketing
Strategies to promote your business.
Key Elements:
- Product/Service: Description and unique selling proposition (2.3 Marketing mix, 2.3.4 Product).
- Place: Where you’ll sell your product (2.3.2 Place).
- Price: Pricing strategy (2.3.1 Price).
- Promotion: Advertising methods (2.3.3 Promotion).
People and Operations
The operational and people management aspects.
People Considerations (3. Human resource requirements):
- Skills Required: Necessary skills for running the business (3.1 Human resources).
- Training Needs: Training programmes for staff (3.2 Staff development and monitoring).
- Structure of Management: Hierarchy within the company.
- Cost: Associated operational costs (6.2.1 Financial terms and calculations).
Operational Considerations (4. Operations management):
- Methods of Production: How your product is made (4.1.4 Production methods).
- Equipment: Machinery and tools required.
- Distribution Methods: How you’ll get your product to the customer (2.3.2 Place).
- Cost: Costs associated with these operations (6.2.1 Financial terms and calculations).
Financial Plan
Last but not least, your financial blueprint for the business.
Key Elements:
- Start-Up Costs: Initial costs to get the business running (6.2.2 Costs, liabilities and assets).
- Running Costs: Ongoing operational expenses. Fixed & variable. (6.2.2 Costs, liabilities and assets).
- Cash Flow Forecast: A projection of your business’s cash flow (6.2.3 Cash Flow Forecast, 6.2.5 Cash flow management).
- Break-even Chart and Analysis: When the business will become profitable (6.2.1 Financial terms and calculations, 6.2.3 Break-Even Chart).
- Projected Income Statement: Forecasted profits and losses (6.2.3 Income Statement).
