Introduction
A business plan can be as simple or detailed as you make it but it can be invaluable. Here, we’ll look at why and how.
What Is a Business Plan?
In essence, a business plan is a description of your business; what it will do; what it will cost to run; how it will make a return, and written in such a way that a reader will understand your vision quickly and easily. That’s it!
Do I really need a Business Plan?
The short answer is ‘Yes’.
Over the years, I have started many businesses, but I’ve rejected even more of my wonderful business ‘ideas’.
My principal business has been running since 2003, and the creation of the business plan for that was spread over about six months.
When I was ready to start the business, I had all the information in a logical and presentable format that I could rely on to explain the idea, the funding and the projected income for five years, with the greatest detail in the earlier time frame. With this 27-page document, I was able to secure an immediate line of credit from a high street business bank, along with an overdraft facility. I was also able to use it to demonstrate to potential suppliers that I had a clear vision for promoting and selling their products in my market and secure exclusive rights for the whole Country.
Other ideas I have been able to study and discard as non-viable with little more than a couple of evening research.
I created one small business plan consisting of about four pages of detail, web links, and a simple income/outgoings spreadsheet. The whole thing took about three days, and I ran this business for around four years before selling it at a profit.
In 2016, I was keen on the idea of opening some launderettes. This was a totally new sector for me, so I put a lot of effort into understanding it. I attended a specific tradeshow, spoke to suppliers, joined a trade association and even located a former launderette that was available to let.
After around five months, everything looked perfect; however, a special business planning tool gave me all the essential numbers and cash flows, and it became clear that my Return on Investment (RoI) was going to be at least five years and the required cash at the beginning, even with using finance, made the project non-viable.
I chose not to continue. The premises remained empty for around three years before being taken on by a centralised laundry service. In the shop, they now offer far more than a simple launderette, and this is the only way that this could have been viable.
You can see that to take the time, albeit only a few evenings, to write out your thoughts, and crunch some numbers is time well invested, whether you go ahead or choose to walk away or something in between, like modifying your initial idea, you can’t really go wrong.
The seven best uses for a business plan
- To clarify your business concept and goals:
A business plan helps you clearly define what your business is and what you hope to achieve. It can serve as a roadmap for your business, helping you stay on track and make informed decisions. - To secure funding:
A well-written business plan can be a key tool in securing funding from investors, banks, or other sources. It can help you demonstrate the viability and potential of your business, and provide a clear plan for how you will use the funds you are seeking. - To attract and retain talent:
A business plan can help you attract and retain top talent by clearly outlining your vision and mission, as well as your plans for growth and success. - To identify and address potential challenges:
A business plan can help you anticipate and address potential challenges or obstacles that may arise as you grow your business. By identifying these challenges and developing strategies to overcome them, you can better prepare for the future. - To track progress and measure success:
A business plan can provide a benchmark against which you can measure your progress and success. By regularly reviewing and updating your plan, you can stay on track and make necessary adjustments to reach your goals. - To gain a competitive edge:
A well-thought-out business plan can help you stand out in a crowded market and give you a competitive edge. It can help you identify your unique selling proposition (USP) and differentiators, and demonstrate how you can provide value to customers. - To communicate with stakeholders:
A business plan can be a valuable tool for communicating with stakeholders such as investors, employees, and partners. It can help you clearly and effectively communicate your business concept and plans, and keep everyone aligned and on the same page.
The Pros and Cons of writing a business plan
Of course, like anything, creating a business plan can have both pros and cons.
Pros:
- A business plan can help you clarify your business idea and goals. It can help you think through the different aspects of your business and ensure that you have considered all the necessary details.
- A business plan can be a useful tool for communicating your vision and strategy to potential investors or partners. It can help you attract funding and support for your business.
- A business plan can serve as a roadmap for the development and growth of your business. It can help you stay on track and make informed decisions about your business.
- A business plan can demonstrate to potential employees that yours is a professional business led by thoughtful founders
- A business plan can help in securing the exclusive sales rights for an OEM
- A business plan should be a ‘Living Document’. Revisions from the plan at the time of launch can show that your original idea has evolved, and it is the ideal way to reassess the needs of the business and plan adjustments, such as expansion/acquisition/new products, etc.
Cons:
- Creating a business plan can be time-consuming. It can take significant effort to research and gather all the necessary information and to write and revise the plan.
- A business plan may not always be accurate. Your assumptions and projections about the future of your business may not always come to fruition, and you will need to revise your plan as you go.
- A detailed business plan may not be necessary for all businesses. Some businesses may be able to succeed without a formal plan, especially if they are small or have a simple business model.
Where do you start?
This is the stumbling point that almost everyone encounters, and is often where great ideas go to die when people are discouraged at this point… Don’t be.
Today, I decided to use technology in the form of the free ChapGPT AI tool. Here’s what I did:
- Went to the ChatGPT site and registered a free account: https://chat.openai.com/
- Created a New Thread
- Entered the following prompt in the input box:
“Write a simple business plan outline for a small start-up business named Gleaming Driveways offering pressure washing services for driveways, footpaths, patios, etc. within a radius of 15 miles of Crawley town centre.The new business will need to invest £1500 in cleaning equipment and two days for training. It will also need a van for getting to and from clients at a cost of £3500 including business use insurance. Public liability insurance will be £750 per year, payable in 12 monthly instalments. USPs for the business are Fully insured, available any day of the week (including weekends), licensed to dispose of commercial waste, fully trained operatives.“ - Pressed the ‘Generate’ button, and waited about twenty seconds for the following output:
Business Plan Outline: Gleaming Driveways
1. Executive Summary
- Business Name: Gleaming Driveways
- Location: Within a 15-mile radius of Crawley town centre
- Business Type: Pressure washing services for driveways, footpaths, patios, etc.
- Startup Costs: £5,750 (Equipment, Training, Van, Insurance)
- Unique Selling Propositions (USPs):
- Fully insured
- Available 7 days a week (including weekends)
- Licensed to dispose of commercial waste
- Fully trained operatives
2. Business Description
- Mission Statement: To provide high-quality pressure washing services, ensuring clean and inviting outdoor spaces for our customers in Crawley and the surrounding areas.
- Business Goals: Establish a strong customer base, expand services, and become a trusted name in pressure washing.
- Target Market: Homeowners, property management companies, businesses within the 15-mile radius.
3. Market Analysis
- Industry Overview: Pressure washing is in demand for property maintenance and aesthetics.
- Target Market Needs: Customers seek professional cleaning services to enhance the appearance of their properties.
- Competitor Analysis: Identify local competitors and their strengths and weaknesses.
4. Services Offered
- Pressure washing for:
- Driveways
- Footpaths
- Patios
- Other outdoor surfaces
5. Startup Costs
- Equipment: £1,500
- Training: 2 days
- Van (including business use insurance): £3,500
- Public Liability Insurance (annual): £750 (12 monthly instalments)
6. Operations Plan
- Location: Home-based initially.
- Daily Operations: Client bookings, pressure washing services, waste disposal.
- Training: Invest 2 days in training for operatives.
- Scheduling: Offer flexible scheduling, including weekends.
7. Marketing Strategy
- Online Presence: Create a professional website and social media profiles.
- Local Advertising: Distribute flyers, posters, and business cards.
- Networking: Build relationships with local businesses and property managers.
8. Financial Projections
- Revenue Projections: Forecast income based on pricing and market demand.
- Expense Projections: Include ongoing expenses such as insurance and maintenance.
- Break-even Analysis: Determine when the business will cover its costs.
9. Legal and Regulatory Requirements
- Business Registration: Register the business name and obtain necessary permits.
- Licensing: Ensure compliance with waste disposal and environmental regulations.
- Insurance: Maintain public liability insurance and other required coverage.
10. Risk Analysis
- Market Fluctuations: Market demand may vary seasonally.
- Competition: Respond to new competitors by maintaining high-quality services.
- Equipment Maintenance: Budget for regular maintenance to prevent downtime.
11. Conclusion
- Summarize the business plan’s key points and the vision for Gleaming Driveways.
- Emphasize the commitment to providing top-quality pressure washing services and the dedication to customer satisfaction.
This business plan outline should serve as a foundation for your startup, providing a clear roadmap for launching and growing Gleaming Driveways. Adjust and expand upon it as needed to suit your specific circumstances and goals.
And that’s it!
- Copy the prompt above and paste it into the ChatGPT prompt box.
- Edit it to suit your proposed business and press ‘GO’.
At this point, you have the skeleton of your business plan, and you just fill in the information needed. Clearly, the more information you can enter into the prompt, the more detailed your output from GPT will be!
If you’ve never used ChatGPT before, think of it as a conversation where you ask someone to do something and it gets done. The more detailed your instructions, the more closely the response will match your instructions.
Conclusion
If you are looking to secure funding or attract investment, a business plan is essential, but more than this, it will allow YOU to look at your proposed business from another, maybe more logical perspective.
There really is no reason to not create your business plan.
FAQ
How short can a business plan be?
Depending on your business, this may be a couple of pages or could run to twenty or thirty pages. It’s up to you; however, if you are looking to raise funding, it needs to have the key elements covered in reasonable detail. These are:
- Introduction and overview of the business idea, describing the main offering, sector, and scale.
- Description of the market, opportunities, and competition
- Some costing figures to show how you will pay for things. This should be by month and go out for at least two years. Don’t forget your own salary, taxes, and allowance for non-earning periods (sickness etc.).
- Describe why your business will win custom from your sector, including your future competition.
An old boss of mine had a phrase that works well, and that is: “Verbosity without substance is not required”. Basically, don’t flower it up or go around the houses; get to the point. Spend the time on research and structure rather than fancy verbiage.
Remember, it’s your business plan, but don’t skimp on your research. At the end of the day, you want to have a successful business.
Should I hire someone to write my business plan for me?
Asking for consultation while creating your plan is completely fine; however, there are several benefits to writing your own business plan. By doing so, you can showcase your passion and personality while also evaluating your business and gaining a better understanding of its strengths and weaknesses. Even if you lack confidence in your writing abilities, you can still write a draft and seek assistance from someone to refine and edit it.
How do I start to write my business plan?
Crafting a business plan may appear overwhelming, particularly when beginning the process. But, once you get started, you’ll be surprised at how smoothly you can capture all the essential aspects of your business, including its present position and future aspirations.
Take things step by step and tackle each section individually.
Use our AI prompt above and start with the basics, such as outlining your company, products, services, and objectives, and the rest will follow effortlessly.
Additional information:
- For detailed information on the sort of things you need to know, see our Getting Started series.
- https://www.gov.uk/government/publications/libraries-alternative-delivery-models-toolkit/stage-7-business-plan
