producing a business plan

 

A business plan is simply a document which sets out how and why you plan to run your business.

Primarily it should help you, by clarifying your ideas. Once you are trading your business plan should help you to know how you are doing. The plan should be a working tool not just an academic document.

In addition you will need a business plan to show people who you want to borrow money from that your business idea is sound and is worthwhile investing in.

Below is a suggested layout of a business plan.

summary

• One paragraph summarising the business
• Level of funding required
• Why the funding is required (e.g. is it for capital equipment, working capital etc.?)
• How much capital are co-op members investing themselves?
• A suggested timescale for re-payment of loans.
• Brief CV’s of the people involved in the business

detailed services or product description

• What are you selling?
• What is unique about your proposal or product?
• What research and development have you done so far?

the market

• Who will be buying from you?
• Why will they chose to buy from you?
• Give results of market survey e.g. how often do people buy or use what you intend to sell. How much do they buy? When do they buy? What do they buy and why do they buy?
• What are your customers wishes? How will your service or product meet these wishes?
• What are your customers doing now in terms of obtaining the service or product you intend to supply?
• Who are your competitors? How do you differ from them? Why will people come to you instead of your competitors? Give details of your competitors and your strategy for dealing with competition.

marketing strategy

• How will you sell?
• How will people know about you?

production of goods or provision of services

• Where will you work from?
• What type of premises will you need and why? If you intend to work from home what considerations do you need to take into account?
• What equipment do you need? Who will supply the equipment? And the raw materials if this is appropriate?
• Will new technology affect your business? If so how?
• How will you ensure service or product reliability and quality?

organisation, control and staffing

• Who are the people involved? Give brief biographical details in a CV format.
• What skills does the group have? How will you learn other skills needed?
• Who will undertake which areas of work?
• How will you make management decisions?
• How will you be structured as a business?
• Are you planning to expand? How will you recruit new members?
• Will you be joining a Trade Union and if so which one?

legal structure

• Why do you want to be a co-op?
• What legal model for a co-op have you chosen?

costings

• How will you cost your service or product?
• What mark up will you have?

money

• Forecasts
• Cashflow projections
• Profit and loss forecasts
• Balance sheets
• Break even analysis

The forecasts, cashflow projections, profit and loss, balance sheets and break even analysis will need to cover the first two years of trading

borrowings

• Capital requirements e.g. machinery, furniture, vehicle
• Setting up costs e.g. insurance, legal fees
• Working capital required e.g. first months rent, first months wages, money to cover overheads whilst waiting for the first months work to be paid for
• What loans or grants are already promised?
• Where do you expect to raise additional loans?

This list is not exhaustive and so you may find that it does not cover elements peculiar to your business in which case you may need to create a new section or make your additions to the existing business plan areas