WHAT MAKES A GOOD BUSINESS PLAN?
Since the Somerset Catalyst programme began back in September 2020 a lot has happened. Our group of entrepreneurs have been going through a journey with their coaches to build upon their businesses and expertise, all while pivoting during a global pandemic.
As we head towards the end of the 2020/21 programme, we have been undertaking a series of business panel reviews where we invited each entrepreneur to present their business plans to a panel of experts that were handpicked for their relevant industry experience. We had a mix of expertise from IP lawyers, angel investors and business owners, to financial advisors and marketing professionals. There was some amazing feedback, and each business took away some new goals to focus on for the coming months.
If you are getting ready to present a business plan, here is some of our top advice on what to include so you nail that meeting.
This shouldn’t be too long but should focus on how your business is structured, who is involved, and how the business is managed. This is a great opportunity to introduce yourself and the expertise of the team.
Your offer and value proposition
This isn’t just what you do, but why you do it. It sits at the core of your competitive edge, it’s the reason why a customer chooses your business over your competitor. It’s important to get right because it acts as the foundation of your business from which everything else can build. Check out our blog here for more on value propositions.
Your typical customer
Understanding your customers involves analysing and validating a complex set of interactions. Just who is it that you are targeting, what do they look like, what needs and behaviours do they have and where do their problems come from? Read more about how to do this here.
You need to demonstrate that you know the market you are entering, the full size of it, what specific segment you are targeting and the value of that segment, the existing competition and of course whether you can create a sustainable business within this market.
Product development or developing your service
How will you be developing your product or service? Are you doing it or is someone else building it for you at a cost? What is the timeline and how will you test it?
Operations and logistics
Include how you will manufacture and deliver your product or service, any potential challenges you have identified (and solved!), and of course any costs associated with operations.
Sales and marketing
You could have an incredible business idea but without any customers you won’t get far, and they won’t be coming to you at the beginning! You need a solid sales and marketing strategy to reach your customers and kick-start your growth. How will you reach your audience and get them interested in your product or service? What is your budget for your sales and marketing efforts and how will you measure success?
IP and barriers
You may not think that you have Intellectual Property (IP) to protect, but trust us, you do! Your company is more than just your turnover. Your company is that special ingredient that makes you unique – it’s what makes you the best in your industry and why people want to buy from you or do business with you. Read about recognising and protecting your IP from one of our mentors here.
You will need to set out not only what your team looks like now, but what you want it to look like in the future. As you begin to grow you will need to start thinking about building a team around you. As a start-up, money is likely to be tight and every small decision you make has significant consequences, so it’s critical that you take the time to find the right people. Read more about this here.
Targets and milestones
Where do you want to be and by when? You need to make sure you aren’t under or overselling your capabilities here. You need to be SMART with your goals and milestones (that’s Specific, Measurable, Achievable, Realistic, and Timely). How much of the market will you penetrate in year one? How will your turnover increase YOY? When do you predict you’ll have the capability to grow your team?
Forecasts and budgets
Provide a framework for your financial objectives over the next three to five years and demonstrate how you know this is achievable with historical data and information on the market. Then show exactly how your budget allows you to achieve this. Make sure you include EVERY expense, from product development to staff costs and travel expenses. And don’t forget to pay yourself!
The chances are you are presenting your plan to someone for investment, so outline what you need and when, how that investment will drive the company forward and what benefits there are for any potential investor.
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