Business Plan – Your Operations

Introduction

In this section you aregoing to describe your business operation on a day to day basis. Itis different and unique for each and every business venture and soyou should Tailor this part of your business plan to reflect themarket you are operating in. But as a minimum you should bediscussing your location, production of your goods and services, ITsystems and management information systems and although this soundslike a lot it is information you should be comfortable with.

Location

You need to talk aboutany business property including if it is a room in your home, talkabout any long term commitments to this property including rent,mortgage, utilities, telecommunications, include costs and if you areoperating out of your home property be sure to assign a share ofthese. For example if your property has 6 rooms and you use 1 foryour business then 1/6 of all costs should be associated with thebusiness. You need to talk about the advantages and disadvantages ofyour current location and very briefly discuss any expansion plans.

Producing your goodsand Services

You need to explain howyou are going to manufacture your goods, will you own your ownfacilities or will it be more financially feasible to outsource theseservices? If you do own your own discuss the quality and how modernthey are, are they easy to expand in volume should the need arise doyou have a maximum volume and what is it, how does this compare withyour forecasted demand? How will you deliver if the demand exceedsthis volume? Do you need any investment in infrastructure. If you donot own your own, who will be your suppliers, discuss any relevantpricing and details about them here.

IT Systems

In todays businessenvironment IT is almost always an important considerations sodiscuss your requirement s and include your current strengths andweaknesses and how you are going to tackle your weaknesses. You needto go into detail about your systems reliability and any planneddevelopment of your systems and what benefits this will bring yourcompany and ultimately the customer. Focus on

• Security
• Reliability
• Performance
• development
• integration with existing systems
• innovation and software development
• capacity
• Back up and redundancy measures

These are all importantfactors in todays business environment and should be addressed.

Management InformationSystems

Describe yourprocedures for stock control, management accounts, quality control,customer satisfaction, sales, marketing, records, data handling,confidentiality, refer to current legislation and detail anycertifications you have or are going to aim for with dates forexample ISO:9002

Can they cope with anyexpansion of the business and are they scalable. Also discuss anyaudits and reviews of current processes and procedures you have inplace to ensure they are current and the most effective for the jobthey control.

Business Plan – You and Your Team

Introduction

Now you may be a oneman band or you may already have 10 partners with differentexperience and expertise or you may already have a work force inplace. The point is this is the section where you need to sellyourself and show what you bring to the business and how you aregoing to fill gaps in the experience. This section is important whenit gets to getting funding, because people are not only investing inyour business and the idea, but also in you as a person. So they needto be sure that you have the right skills and background to get thisdone.

Your Teams Skills

It needs to clearly layout the skills you have in your management team and your staff,concentrate on the strengths in your team and show how you are goingto deal with obvious weaknesses. Please note the word obvious, if youhave no one with marketing experience and this is clear then yesdiscuss how you are sending the GM on a marketing course to fill thisknowledge gap. But you don't want to discuss the GM's love ofholidays and so he takes time off every 5 weeks. Only talk about whatis glaring and what needs answering.

The Management Team

This can sell yourbusiness and get you that much needed investment so how do you do it!Explain who is involved, how they fit into your organisation. Includea C.V. For each key individual in the appendix and a paragraph oneach person in this section. Concentrate on RELEVENT experience,skills and qualifications. Also include the greater support network,financial advisers, accountants, lawyers and specialist advisers.

In order to securefunding this section must prove to potential investors that you havethe right mix of skills, determination, drive to make the business asuccess, with a keen focus on the business related aspects includingoperation and market experience, sales and marketing, financial andpossibly man management these are just as important in marketspecific skills.

This section is whereyou show your commitment to this venture so give it your all, letyour excitement, commitment and personality come through this willhelp you emotionally connect with investors.

The last thing youshould discuss in this section is how much money will each individualdraw from the business, this is very important for an investor asthey use this to determine how much of a stake will be left. It isimportant to leave a substantial percentage for business development,especially in the first 3-5 years, this shows a long term commitmentto this venture.

Your people

Give informationregarding the size and demographics of your workforce, break themdown by department if that is appropriate assign responsibilis andtalk about any branch of the business which will be outsourced. Ifyou are already established important stats include retention rates,productivity, average salaries and sales per employee if appropriate.

This section shouldalso contain information about your recruitment and trainingprocesses, it should show a commitment to your people and shouldindicate time-scales and costs involved.

Be realistic aboutmotivation and loyalty of your staff, we all know cold calling saleshas a high turnover, but what investors want to see is how are yougoing to improve staff morale and improve commitment.

We will next be talking about the operation section of the business plan.

Markets and Competitors

After working through the previous two posts you have a clear vision and a direction, you know what products and you have some basic information regarding your customers and how you are going to get the products to them.


Now in this post we are going to help you define your market, your companies position in it and who your main competitors are. In order to do this you need to do some market research, there is some useful information here regarding doing your market research.


Once you have gathered all the information you will need to collate it all. You should have information on:

• Total size of the market
• Your main competitors and their share of the market (think local and national)
• history of the markets and the products
• your customers and their buying habits
• Product pricing and availability 

The main point of this section is to tell your reader that you know this market, you understand the trends within it and what drives it. You need to show that it is a growing market and how you are going to attract customers despite the competition.


I hear you say how am i meant to do this, well if you have been operating and or working in this market for a long time then it will feel natural and you will know this information naturally. If not then these are what you need to focus on to ensure that the readers get the level of detail they require:

1. your target customers - Who are they, what is their demographic information, including disposable income and spending habits, how you know they are interested in products and services you will be supplying. Why this group of people.
2. your competitors - who are they, how do they operate within the market, what is their main customer base, market share, it's good to perform a SWOT analysis on each competitor as well as yourself.
3. the future - Expected changes to the market, focus on how you and your main competitors will react and use this section to show how you are innovative and understand the trends and what drives the market and how you can fill a gap in that market.

I will be writing further posts on market research and competitors at a later date so please take a look at those to help with this section. But for now check out this article on Market Research

An important note to finish on is that markets, competitors and customers are not static entities they change and are very fluid by showing contingencies and other scenarios you are showing the reader you understand this and it adds a layer of trust and believability to this section of your plan.

Next up we'll be looking at you and your team and how this can be a big part of making your business a good investment prospect. As usual any questions  please feel free to ask.

Your business, products and services

With this post we are going to focus on your business and what is going to make you unique and stand out from the sea of competitors offering similar products and services.

You have written your Vision Statement using the previous information. We will now use this and expand upon it to build a clear picture of what your business will be, your target customers and what you will be offering them. This is all information that others are going to want if they are to provide funds or investments.


Now for this section you want to start out by giving an overview of your business, focus on:

• The date you started trading or proposed start date.
• Any investment or projected investments to date.
• The type of business and the sector that it is in.
• History of the company, including if applicable, previous owners, franchise information, previous successes
• The legal status (e.g. sole trader, partnership, LLP, LTD) here is a good link for information about these
• Your vision for the future.

With all of this you will have given investors, banks, partners, angels the information they need to look further at your plan.

Following on from this you are going to discuss your products and or services. An important point to keep in mind is that the person reading your plan may not know anything about the industry, market or products you are offering, so it is vital to keep jargon and acronyms down to a minimum.

You need to consider and write about the following:

• Describe your products and services as simply and clearly as possible.
• What makes it different from similar products.
• What benefits does this have for both your customer and your business.
• Why will customers buy from you rather than competitors.
• the key features and success factors in the industry you will be operating within.
• How you plan to develop you products and services to ensure you are current
• Any patents or trademarks you currently have

In order to do this accurately you are going to have to have started looking at your competitors and there products, customer bases, look into the size of the current market and what market shares the main companies have. This will help you with this and the next section.

You know your products and customers and so you can read this and fully understand it, to ensure that a person with no industry knowledge can understand it, give it to a friend or family member to read over and ensure that they understand the information within.

Information within here will help give your business shape and ensure that you know who you are targeting and what you have to offer them that makes you stand out from the rest.

Next time we will look at the markets and competitors section of your plan.

Your vision, Your Plan

In the last post we briefly spoke about writing down what you want your business to be,  the main services or products, who your main customers are and finally some short, medium and long term goals.

If you did as the last post suggested and wrote a little about your business ideas, customers and goals then you can skip the below template. If you didn't use this little template and fill in the blanks.

Within the next ___years grow (company name) ___________ into a business with £ ______ worth of annual sales.
We will primarily operate in ______________
providing (describe products/services)_____________________________________
to (describe target customer and ideal client)_________________________ In the next year I aim to be                

                                       within the next three years I aim to be                            

Using this simple but powerful statements gives you a clear and concise vision with which to start your business plan. You can keep looking back and referring to it as you build the plan, allowing you to keep focused on what you want your business to achieve. It will help keep your plan lean and targeted.

If you have multiple markets and or products you may want to write something similar for each niche.

Believe it or not by writing the above you have already wrote your vision statement as it focuses on the what's of your business, it describes your idealized perception of what your business will look like under ideal conditions, the key components are:

1. Name of planned business venture
2. The products/services you plan to provide
3. The target markets you intend to serve
4. Top level Goals

This doesn't tell you how you are going to get to your goals, but it does set the direction of your business planning so it is important to get it right.

Leave a comment with any questions and i'll get back to you.

In the next post you may expect me to discuss the executive summary, as that comes at the front of your business plan, but it needs to be reflective of the overall plan so we will tackle that last. We will look at the your business, it's products and services.

Starting a business - The Business Plan

Over the coming months, I'm going to be writing about the importance of business plans, how to go about creating business plans and finally how to take that step from business plan to running the business.

General overview

A Business plan is arguably the most important part of any new start up business, or for that matter any business at all. Why? I hear you ask! It gives your ideas substance and a logical framework with which to build your dream into a reality. Not only this but anyone wanting to invest will want to see it. It is the guide to your business.

There is a very famous saying:

Failing to Plan, is planning to Fail

This was said by Ben Franklin, Churchill and many others in some form or another. It really does apply to business plans. Did you know that 95% of businesses without a business plan fail... yes I know 87.567% of statistics are made up but feel free to go and verify this one. Without direction a new venture is likely to not succeed. Why start if you don't plan to succeed so get planning.

 Now you know why you need one, what exactly is it? A business plan is a working document (by that I mean you don't just write it once put it in that file and dust it off once every three years to show the bank when you want an overdraft or loan) It should be flexible, it should grow and change with the ever changing face of your business, it should reflect your business goals and finally but most importantly it should be current and up to date.

I won't go into detail over how to write one here as that is for future posts. I'll just leave you with this If you want your business to succeed you have to plan for success, you need targets and plans these can't be in your head they need to be recorded, so please start by just jotting down your business ideas, what is the general concept, who are your potential customers, what are your short, medium and long term goals.

I want to start a touring theatre company, which will supply theatre workshops to support the national curriculum. I want to deal with schools, local councils and government and social groups. I want to start in my local area probably with one troupe and once this is financially successful I'd like to branch out to other areas in the UK and eventually be the leading provider of TIE (Theatre in Education) for the UK. 

This is all your start needs to be it states what you want to be, it's main market and niche and some short and longer term goals. It is very basic and a top level overview of what you want to achieve, but it is a great starting point.

In the next blog we will build on the above and start talking about how we turn our vision into a business plan with substance.

Please feel free to ask me any questions you like by leaving a comment.

and check out businesslink.gov.uk which is a very useful site with lot's of information about starting a business including writing your business plans.