Dr Emma Smith, a business expert at Cool Ventures, answers some of the most common questions from aspiring entrepreneurs.
Question: I haven’t got a business plan yet. Do I need one?
Most aspiring entrepreneurs will benefit from doing some form of plan, once they have first established what they actually want to achieve.
First of all, you will need to think of your end goals
It’s really hard to plan without clear goals in mind. Imagine if you wanted to go on holiday. There’s no way you could do a detailed travel itinerary about how to reach your accommodation, if you hadn’t first decided what country you wanted to visit.
Business planning is exactly the same. You need to pick a desired destination first, then you can plan how to get there.
When we meet people who are getting stuck with how to plan their business, the underlying reason often relates to their goal setting.
Sometimes they haven’t decided what goal they are trying to reach. This makes planning the detail of their business journey impossible.
Alternatively, there may be too many different destinations. If you were travelling the world, you would find that you can visit multiple destinations but you cannot go to all possible destinations at exactly the same time.
Starting new business activities is conceptually similar. You can start more than one project and have lots of projects over the lifetime of a business. However most people will struggle to plan and implement multiple new projects at exactly same time. Most likely you will get totally stressed and overwhelmed. Hence, its helpful to establish goals before launching into the planning process.
Any goals set should be specific and achievable. If there’s multiple goals for lots of different business activities, decide which ones are the priority to focus on first.
Think of what type of business plan you need
Once you established your goals, you can consider what type of planning you need to do. Not all businesses need exactly the same type of plan in the same format. Some things in business can be planned simply and fairly loosely. However, the more complicated, risky and financially involved the activity is, the more important it becomes to have careful and detailed advanced planning.
There are many different types of plan you can do. The optimal type of plan will depend on what stage you are at and what you are trying to achieve.
Common plan types include:
- Business model – a conceptual plan of how the business activity will work overall – useful at the start of a new business or new line of business.
- Formal traditional business plan – detailed overview of the whole business, including financial projections. Routinely required by lenders when raising finance.
- Marketing plan –may be part of a formal business plan, or standalone.
- Growth plan – specifies how growth in a trading business will be measured via various Key Performance Indicators (KPIs), and plans how to achieve the desired growth.
- Action plan – a specific plan of action in response to a specific scenario or problem
Most people, when they ask if they need a business plan, are referring to a formal traditional business plan of the type often required by lenders. Not everyone needs to do one, some people will be better served with one of the other plan types described above.
When to choose a traditional formal business plan
If you are looking to work through the plan for the business as a whole, including checking the financials, then a traditional business plan will be a useful thing to do. It is also helpful when you need to share and agree the full plan for the venture with others, such as business partners and/or you need to submit a plan to a lender to raise finance.
Brand new to business are also likely to benefit from developing one. Working through a new business structure can give you confidence that you have genuinely thought through all the major basic topics that a business owner should consider at the outset. It is also a form of risk assessment – it helps you check that the overall financial plan looks likely to work before you actually launch.
A conventional business plan will include details of the:
Free business training to help you write your business plan
If you’d like to learn more about completing a traditional business plan, Cool Ventures run regular Business Planning webinars. During these webinars we go through how to complete a conventional business plan template, including the financials.
They are free of charge if you are based in Bath & North East Somerset or South Gloucestershire. Find out when is the next session by visiting www.coolventures.co.uk/training.
We have other courses covering other types of planning. If your ideas are at an early stage, you might benefit from completing our Starting in Business course first. We run these sessions regularly and the next session can be booked here.
If you are already trading and would like a growth strategy rather than a traditional business plan, check out the Creating your Business Growth Road Map course. For marketing action plans, consider the Win More Customers course.
About Cool Ventures
Cool Ventures provide fully funded business support for South Gloucestershire and Bath & North East Somerset residents and businesses. Find out if you or your business are eligible by visiting our Business Support page. Alternatively call us on 08000 418293 or email firstname.lastname@example.org.