A business plan is a written description of your business's future, a document that tells what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you've written a plan or at least the germ of a plan.
ICS Legal Project Team
As always we can tailor a business plan to your specific requirements, so email us with more information to info@icslegal.com or speak to one of our advisors on 0207 237 3388.
Why you need a business plan?
A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.
A business plan helps you to:
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clarify your business idea;
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spot potential problems;
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set out your goals;
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measure your progress.
You’ll need a business plan if you want to secure investment or a loan from a bank. It can also help to convince customers, suppliers and potential employees to support you.
Strategic Business Plans
Business Plans are inherently strategic and are now part of a requirement when submitting an application for a "Business Visa". At ICS Legal we are now increasing our level of support and one less thing to worry, which is why we have a team to help in developing a business plan which would not only meet the requirements of the Business Visa but also help you plan your business. A business plan is an essential roadmap for business success. This living document generally projects 3-5 years ahead and outlines the route a company intends to take to grow revenues.
We specialise in preparing a business plan for all types of businesses. This includes:
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Business research.
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Guidance and support on correct marketing models.
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Cash Flow forecasting for next 3 years.
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Business development advice.
The most suitable finance option for your business depends on many things, including:
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how much funding you need;
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your current business revenue or if you’re a new business;
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whether or not you’re willing to offer personal assets as security – this can make it easier to get funding but is risky if you’re not able to maintain payments;
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whether or not you own a business property – this can make it easier to get funding;
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whether or not you’re willing to sell shares.
Writing a business plan
Many potential start-up businesses are daunted by the prospect of writing a business plan. But it is not a difficult process - and a good business plan focuses the mind as well as helping to secure finance and support.
The business plan will clarify your business idea and define your long-term objectives. It provides a blueprint for running the business and a series of benchmarks to check your progress against. It is also vital for convincing your bank - and possibly key customers and suppliers - to support you. This briefing explains what information to include and how to present your financial forecasts.
Executive summary
The executive summary outlines your business proposal. Although it is the last section to be written, it goes on the first page of the business plan. It will be read by people unfamiliar with your business, so avoid jargon. The executive summary highlights the most important points and should sum up six areas.
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Your product or service and its advantages.
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Your opportunity in the market.
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Your management team.
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Your track record to date.
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Financial projections.
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Funding requirements and expected returns.
When deciding whether to back a start-up, bank managers and investors often make provisional judgements based on the executive summary.
The main body of the business plan is then read to confirm the initial decision. The appendices at the back of the plan carry detailed information to support the main text.
The business
Explain the background to your business idea, including:
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The length of time you have been developing the business idea in its present form.
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Work carried out to date.
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Any related experience you have.
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The proposed ownership structure of the business.
Explain, in plain English, what your product or service is. Make it clear how:
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it will stand out as different from other products or services.
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your customers will gain through buying your product or service.
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the business can be developed to meet customers' changing needs in the future.
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It is important to cover any disadvantages or weak points you feel the business may have. Be frank about these - it inspires confidence.
Explain any key features of the industry (eg special regulations, effective cartels or major changes in technology).
Markets and competitors
Focus on the segments of the market you plan to target - for example, local customers or a particular age group.
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Indicate how large each market segment is and whether it is growing or declining.
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Illustrate the important trends - and the reasons behind them.
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Outline the key characteristics of buyers in each segment (eg age, sex or income).
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Mention customers you have already lined up and any sales you have already achieved.
What are the competing products and who supplies them?
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List the advantages and disadvantages of all your competitors and their products.
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Explain why people will desert established competitors and buy from you instead.
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Show you understand your competitors' reaction to losing business and demonstrate how you will respond to it.
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Unless there is a viable market and you know how you are going to beat the competition, your business will be vulnerable.
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You must show you have done the market research needed to justify what you say in the plan.
Sales and marketing
This section is crucial. It often gives a good indication of the business' chances of success.
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How will your product or service meet your customers' specific needs?
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How will you position your product?
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This is where you show how your price, quality, response time and after-sales service will compare with competitors.
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Quote minimum order figures, if appropriate.
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How will you sell to customers? For example, by phone, through your website, face-to-face or through an agent.
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Show how long you predict each sale will take. Many new businesses underestimate the time involved in winning each order. In year one you may spend up to 80 percent of your time making contacts and selling.
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Will you be able to make repeat sales? If not, it will be hard to build up the volume.
Who will your first customers be?
The show which customers have expressed an interest or promised to buy from you and the sales they represent. How will you identify potential customers? Unless you can demonstrate that you have a clearly defined pool of potential customers, starting your business is likely to be a struggle.
How will you promote your product? For example, using advertising, PR, direct mail or via email and a website. What contribution to profit will each part of your business make?
Most businesses need more than one product, more than one type of customer and more than one distribution channel. Look at each in turn. Examine your likely sales, gross profit margins and costs. Identify where you expect to make your profits and where there may be scope to increase either margins or sales. Services and intangible products (eg computer software) are more difficult to market. Start-ups in these areas must pay special attention to marketing in their business plans.
Management
People reading the business plan need to be given an idea of why they should have faith in the management of your start-up. Outline the management skills within your team.
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Define each management role and who will fill it.
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Show your strengths and outline how you will cope with any weaknesses.
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Describe the background and experience of each team member.
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Clarify how you intend to cover the key areas of production, sales, marketing, finance and administration.
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Management information systems and procedures should be outlined. For example, management accounts, sales, stock control and quality control.
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Show how many 'mentors' and other supporters you will have access to.
Financial forecasts
Your financial forecasts translate what you have already said about your business into numbers. A realistic sales forecast forms the basis for all your other figures. Break the total sales figure down into its components (eg different types of products or sales to different types of the buyer). Your cash flow forecast shows how much money you expect to be flowing into and out of your bank account and when. You must show that your business will have access to enough money to survive.
Demonstrate that you have considered the key factors affecting cash flow - eg level and timing of sales revenue, wages. Show when there will be more money coming in than going out ('cash-positive'). Your profit and loss (P&L) forecast give a clear indication of how the business will move forward. Summarise the annual P&L forecast for each of the first two or three years of trading. If you are launching a larger start-up, you will also need to be projected balance sheets. These will show you the financial state of your business on day one and at year end, perhaps for the first two or three years.
Do not forget to do this: Put a cover on the business plan and give it a title. Include a contents page. Re-read it yourself. Would reading your plan give an outsider a good feel for your business and a grasp of the key issues? Show the plan to friends and expert advisers and ask them for comments.
