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.

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.

Business software on the cloud

A fairly new phenomenon and taking the business world by storm, is that of cloud computing. With a range of applications from business plan writing to small business accounting software, stock management, word processing, budgeting and a hoist more, small businesses especially can only benefit from the flexible availability that this technology provides us. Cloud computing gives business a way of managing data, hardware and software requirements using resources on the internet. Documents, emails, customer information, business applications and other assets are all stored online - 'in the cloud'. This makes them accessible from any computer or mobile device with an internet connection and a web browser.

A very simple example of cloud computing are email providers like Yahoo, Hotmail or Google. Instead of running an email client locally on your computer, you access your emails from any computer, anywhere in the world, by logging on to your account over the internet.

Software as a service is one of the most common forms of cloud computing. Examples of web-based software that's available 'in the cloud' include services like office software, customer relationship management systems and tools that support collaborative working.

Cloud computing gives greater flexibility, letting you adapt your IT needs to meet the changing requirements of your business and the market place. For more information see our guide on cloud computing.

The advantages of cloud computing include:

• reduced IT costs - including capital expenditure and operational costs
• the use of a 'pay-as-you-go', subscription-based business model
• scalability of service to meet your business requirements
• access to the latest technology over the internet because it's a hosted solution 
• more flexible working practices - eg mobile and virtual working
• enterprise-level back-up through professionally managed data centres
• a more environmentally friendly approach - eg reduced utility costs and hardware redundancy

The disadvantages of cloud computing include:

• Data protection - loss of data by service providers, unauthorised access to your data, or malicious activity like hackers or viruses tageting providers.
• Business continuity - it is possible for service providers to lose data, suffer denial of service attacks, or go out of business. How will you manage such risks and how will you minimise the impact on your business?
• Service 'lock-in' - it may be difficult to change providers once you have committed to a service. When choosing a service provider, look for an established product from a reputable vendor. You should also look at the contractual and technical restrictions that may affect future software decisions.

See our guide on how to comply with data protection legislation.

With cloud services, it is no longer necessary to install and set up software across the business yourself. All your 'business applications' will be provided and managed over the internet. This differs to the more traditional approach of managing all your IT requirements, both software and hardware, inhouse.

Cloud computing can help businesses make the most of limited IT budgets, while the level of professional support they provide can help the business develop more quickly. However, cloud computing may not be suitable for every business - so look at piloting cloud services with non-critical applications or business processes first.