Writing up a Business Plan - Is it really needed?

[AngelaE]

Hi all

Has everyone on this forum who runs a successful small business sat down and completed a full business plan? I have seen these business plans and there is a lot of detail to consider.

I wondered if anyone achieved the same success with just dealing with the top level stuff in a bullet point way i.e. knowing there is a market, pricing structure, knowing target audience and how to advertise.

I understand of course, that you would need to have a detailed plan put together if you required funding from certain sources, but if you didnt - did you sit down and go through the whole document?

I'm conscious that I may be coming across lazy and potentially naive, but I feel that I just want to get on with it, rather than spending so much time completing a bit of paper....

 

[salad_bowluk]

Best to get things down on paper. Usually if you don't you do not concider all the possibilities of what could happen. What you think may be a good idea, may not be to your target market. It also depends on whether or not you need outside investment, then its crutial to, in-detail, explain where you want to go and how your going to get there. Business plans cover most things but it really does depend on how big your business is and how much needs going into it. Hope this helps

 

A business plan is a means of communicating to funders that you have spent time thinking carefully about all aspects of your idea

Bullet points and a summary have their place but are not a substitute for a full business plan

You will definitely benefit yourself from putting your thoughts onto paper in a comprehensive manner and you will have something
to bounce off your peers

 

[CompactCleaning]

So it's not just me. I am starting my business soon and the market is there, I have the equipment and a few hundred pounds for advertisement and have people that will use me, so why do i really need a plan, noting and bulletpointing, I think, will be perfect for me.

CC

 

[AngelaE]

Thanks all for input so far!

How refreshing carpet cleaning!!! I guess it depends on the type of business you go into determines how detailed it is and whether you need a lot of money invested into it from self and funders. My business start up is not going to cost me much and I know the concept works as its out there now which is Staff Development Training. Living next to the big city helps too so I know I have a big market - I just need to tap into it!

 

[CompactCleaning]

Not just carpet cleaning haha everything cleaning

CC

 

[AngelaE]

Apologies I misread compact to be carpet!

 

[KJL126]

the business plan makes you sit down and consider 'what ifs', eg what if that happened , what if I got a big contract, what if i get no contracts for 4 months?

Whether this is formatted in a formal manner or done in bullit points depends on what you are using the plan for. There is nothing wrong in abbreviated versions if it is for you and you understand it.

The plan however will guide you through areas that perhaps that not much consideration has been given.

Exciting times for you enjoy them, but sitting with a glass of wine and pencil and paper, planning your future is time well spent.

Good Luck

 

[AngelaE]

I like the glass of wine part it makes the business plan far more appealing!

Thanks KJL

 

[Chris Ashdown]

Forget the banks and the like, the business plan should be for you and any partners you may have

It's a way of writting down your bullet points covering all the likely senario's to getting the company up and running in the first year and to a further few years if required

Anyone can start a company and buy item,s at £x and try to sell at £X +30% or sell their services to get £xxxxx per year, most fail in their first year they talk themselves into easy selling and confuse gross profit with net, dont include bank charges or NI among others

With the business plan you enter the bullet points and then go into as much detail as you feel you need to be able to prove to yourself the company will be able to support you long term

The biggest part will probably be research, where do you buy from, what competition do your have, what price will people buy from me at, how big a discount do exsisting companies give the customers I want to pinch and so on

Cashflow kills most companies, you have started built up a great little company and suddenly start getting far bigger orders than before, you buy your products or service from company A and sell at a profit to company B, you pay company A usual terms 30 days and expect customer B to pay you the same way, in the meantime you might get another customer C and fill his order, customer B & C take their time paying as they have a problem with cash flow, you are in the **** all your money spare money went to company A and now nothing left for wages or to pay other suppliers, GREAT SALES NO MONEY COMPANY BUST

So if you do your homework well at no risk by making a full plan you may find any faults with your proposal

Sorry if bit pompas, but most failures are plans written on back of fag packet

 

[Lease4Less]

I totally support what Chris has said.

I am amazed that people would consider going into business without a detailed business plan. You need to know from the outset whether or not you have a business that can survive.

You are going to be giving up jobs/investing money in something that without doing your homework may well be a terrible idea.

Lots of profitable companies end up either going bust, or having financial difficulties because they haven't had a grip on the basics.

 

[AngelaE]

Lease4less - Of course I am doing the homework and research, which is only common sense, all I am saying is that I am not putting it down onto paper in a very detailed way. I am still in a full time job at present and wouldnt dream of even walking away until I generate interest to allow me to go part time and then hopefully no time for the business. I only question the amount of time required writing up the detailed business plan, not the content that the business plans prompts you to consider.

 

[Lease4Less]

Lease4less - Of course I am doing the homework and research, which is only common sense, all I am saying is that I am not putting it down onto paper in a very detailed way. I am still in a full time job at present and wouldnt dream of even walking away until I generate interest to allow me to go part time and then hopefully no time for the business. I only question the amount of time required writing up the detailed business plan, not the content that the business plans prompts you to consider.

Angela,

With respect, if you can't be bothered to spend a time filling out a business plan then you are going to have a nasty shock when you do launch your own company.

If you are doing the homework and research, then why wouldn't you want to committ all this into a detailed plan?

My business partners and I spent nearly 12 months devising our business plan, and it was wrote, torn up, re-wrote, torn up, re-wrote etc... before I was confident enough to give up a well paid job to launch into the world of self-employment.

 

[We Do PPI Claims]

i would say yes and the key is to go back to the business plan every 2/3 months and re-read it and assess where you currently are and then decide if you need to make any day to day changes in the running of your business

 

[Philip Hoyle]

I don't really think you do need a full business plan. It really depends on what you're planning to do and whether you need investors or loans. *Some* people feel happier committing their thought processes to paper and that's fine, but equally plenty of people just do the thinking. If you need loans or investment, then it's a necessity, but if it's just you then a full business plan is an optional extra.

I inwardly cringe sometimes when a new client comes in with a textbook business plan that they've obviously spent many hours compiling but which is never going to be read by anyone and will just gather dust for eternity. Some people really go to town on writing the blatantly obvious and irrelevant just because the template included it, yet they barely scratch the surface of the critical stuff like break even analsyis and sensitivity analysis which is really important.

I'd say what is far more important are the financials and you don't need to compile a business plan to do the figurework. You need to estimate sales, you need to estimate margins and you need to estimate overheads. You can very simply work out breakeven and even some simple sensitivity analysis. You don't necessarily need detailed cash flow forecasts or profit & loss projections. Of course, if you're say a restaurant or engineering firm, buying lots of stock or equipment, or giving your customers credit terms, then proper cashflow forecasts become more important, but for, say, a window cleaner or a jobbing gardener, then it's pretty much irrelevant - all they'd need is some very simple figures for how much they have to make per day to cover their living costs etc if, say, their overheads were minimal and they were paid cash in hand.

I really don't like the mantra that *every* business needs a full business plan. Some do, some don't. It should be driven backwards from who needs the end result. Complex businesses will need a plan, simple businesses don't.

 

[Strontium Dog]

Just buy one inexpensive book, "Mastering The Rockefeller Habits", By the above gentleman. It is supported by a free websites with downloads on it. You end up writing your plan on a sheet of A3 (template provided).

 

[AngelaE]

Thanks Phillip - just what I was wondering. It is good to hear from your perspective about the business plans you have reviewed. I take it on board that it is required where necessary for funding and for, as you say, complex businesses. My business is not that complex and don’t think I need to spend months and months going down into so much detail.

Rob – It’s not a case of that “I can’t be bothered” I am trying to be pragmatic with my time and effort. Perhaps I can give you an update in a couple of years time as to how it all works out!

 

[Geoff T]

My business idea was - and is - simple... so was my business plan...

Two years on, my biz suffered as a result... think on...

The more you do at the start, the better prepared you'll be after you start (and get to bogged down "in" the business, rather than "on" the business)...

 

[K-rado]

I agree. I do not believe that you need a "full" business plan .i.e the 30/40 pager templates if it is for your own use. But I do believe that you need an all encompassing business plan regardless of the number of pages. All R&D information can go into it as bullet points for ease of reference. The section about you, your partners does not need to be glossy, but it does need to highlight areas of your strengths and weaknesses. The business plan focuses' the mind and you should refer to it frequently and change as necessary. The elevator pitch, the first section that you are advised to do last, needs to be well defined and honed to be as short as possible. The financial section needs frequent reviewing, weekly in some cases. Keeps your eye on the prize. i.e, making a profit! K

 

[CompactCleaning]

I am not at good at explaining my ideas and luckly I do not need any investers (althought if I did I would write a very detailed business plan). For me personally I do my home work, I jot everything I find out down in a big pad, I can these use this to flick through and my whole business is there right before me. It is for me and me only and as long I understand it and it comes together in my head, why do I need to write it up all indepth and detailed when I know exactly what it means?

 

[K-rado]

Is this not your business plan? I think you will agree that it does not matter what it looks like but it is an important tool never the less. The standard temp's are good for the key bullet points and you will nodoubt cover these anyway.

 

[CompactCleaning]

Well I guess, but I think the OP ment a coventinal business plan haha.

CC

 

[Chris Ashdown]

To put it simply

The more work you do to get answers to the questions required to start up and run a business the easier and more time you will have to solve unexpected problems after you start

If its all in your head then fine but a big but, it's far easier to write it down so you can quickly see your original thoughts or ways of tackling a problem

Nobody say's this should take months or weeks, just enough for you to have covered all the basics, and don't forget most companies take a few years to make a real profit, although some are lucky to be in an industry that can

 

[maxine]

I've seen people spend years on absolutely mammoth business plans which in truth is just a way of procrastinating and putting off the real world and getting on with it.

And then I've seen people who have done absolutely zero and just jump straight in!

I think the biggest mistake is to think theres a market out there I just need to tap into it without thinking about how, or how much that will cost, and other things.

It ends up with people scurrying around trying to find customers from just about anywhere sometimes with huge effort to end up back at the starting point.

So, I think you need to do the level of planning that is right for you but certainly one that covers at a minimum...

* Marketing and Sales (research, costs, sales targets by timeline)
* Costs
* Cashflow

Good luck

 

[accountancyextra]

I thinks it's absolutely neccessary for every new start up (that wants to be successful) to have a full business plan. However, my view of full and what others view as full may be differant. As an example, full in this thread seems to imply a large number of pages. I don't believe you need a large number of pages, but do believe that you should consider every part of the business before launching in, probably in much more detail than you realise.

For me essentials are:

• Target market
• Reaching that target market (a marketing plan)
• Your products and services
• Competition
• SWOT
• Why you are differant (why should I choose you)
• Pricing
• Customer promises
• Operations/ fullfillment etc
• Financials incl a detailed cashflow
• Sensitivity on the financials
• Breakeven analysis
• Key performance indicators
• Exit Strategy (including what to do if it all goes wrong!!)

You don't need 30-40 pages, but beleive me, writing it all down doesn't half make you think. All of a sudden it becomes "joined up" and you can see the gaps in your thinking so easily.

 

[Admor]

Lease4less - Of course I am doing the homework and research, which is only common sense, all I am saying is that I am not putting it down onto paper in a very detailed way. I am still in a full time job at present and wouldnt dream of even walking away until I generate interest to allow me to go part time and then hopefully no time for the business. I only question the amount of time required writing up the detailed business plan, not the content that the business plans prompts you to consider.

Business Plans
For those who like to write things down, especially if starting a new business, the conventional option is a Business Plan. They definitely have a critical place, especially if seeking funding.

I have reviewed many Plans for start-ups and they were mostly not 'fit for purpose' despite clearly taking the writer (or their accountant) many long hours to produce.

Business Models
The alternative, especially if it is primarily for the owner's use, is to complete a 'Business Model' (about 2/3 pages in a Word type document). This contains some of the items that 'accountancyextra' lists above and focuses on clear answers to specific questions about the business and how it will operate, who it will sell to, at what price, incurring how much cost, using which delivery channel, employing how many etc.

Using this latter option concentrates the mind and is better still if the writer gets someone independent to review and challenge what they wrote.

It is a good way to test out a new idea that may or may not be commercial. Then, if needed, use this as the basis for a more detailed Business Plan.

 

[TotallySport]

I don't think its always important to have a business plan, I only every wrote one because the bank asked for one, and even when it was done I didn't like it.

Its a bit like everything it suits some people and doesn't others, I am just not academic enough to write a business plan.

It is important to have all the facts and figures in a way you can work with, but you don't have to call it a business plan, and you don't need to write everything down, unless you need to let someone else know the plan.

 

[Chris Ashdown]

It does not matter how you get the plan, if you write it down,or keep it in your head, but the whole point of the plan or whatever you want to call it is to research what you propose to undertake; and find any faults with your idea; and if it will work in the short term (say 2-3 years)

If you write it all down, you have more chance of giving each point more thought; and you can go back and forth revising things as you get more research completed

Without cash-flow and profit and loss plans, you will be working blind, and stand the very strong chance of failure

There will always be a wizz kid on here, who will tell you they did it all on a fag packet, and they may well have been successfully in doing it, but if you make a plan to the best of your ability you stand a much better chance of getting it right first time and significantly open your eyes to what you are about to undertake

Question:

What better thing can you do in your spare time before you start, than think it all through. If you don't write it down how do you calculate your break even figures or how much you need to sell to cover overheads

 

[James Copperwaite]

Visit Wisteria Business Plans. They can help with this.

 

[ESUP]

It is worth looking here

http://www.business.hsbc.co.uk/1/2/...ting-your-business/writing-your-business-plan

To be honest it makes you think, stop, think some more. It also means you can give it to friends/family/advisor's and they can look at your business and see things you haven't thought of.

It is worth every minute you put in if you do it properly. Start as you mean to go on, doing things properly is not a bad thing. We review the plans for our businesses every six months and re-do the business plans every twelve months.

It is one thing to have everything in your head, but when you grow it isn't just you anymore.

Businesses change, markets change, opportunities change.

 

[James Copperwaite]

Site looks good. Shame it is no longer active. I might be able to help you with this further.

 

[wisteriabusinessplans]

the need for a business plan will depend on what you are intending to do. MAny different people will have different purposes from seeing whether the business idea is viable, will it be profitable to trying to impress and persuade potential investors to lend them some money. so it really depends on your needs as to whether or not your will require a business plan.

At Wisteria Business Plans, we offer you the chance to choose each section individually and then we meet with you to build a business plan from scratch around your business. if you would like more information, please feel free to call our London office and talk to Jermaine, our business plan consultant. our number is 020 8952 0140.


Cheers and hope this helsp

 

[Admor]

Visit Wisteria Business Plans. They can help with this.

I notice this is your own business.

 

[mhall]

Busines Plan - Nah - you only need that if you are after funding from someone

Business Proposal - YES YES YES. Prove to yourself the business will work. I don't care if you write it on the back of a fag packet - get it out of your head and on paper so you can be challenged and questioned by people who care. Six pages, ten pages, one page - do as much as you need. As others have said, every hour spemnt on the planning stage, DONE CORRECTLY, will be worth thousands to you in the long run.

Back to my old Dad - "If your idea is only in your head, you're still dreaming"

 

[James Copperwaite]

Busines Plan - Nah - you only need that if you are after funding from someone

Business Proposal - YES YES YES. Prove to yourself the business will work. I don't care if you write it on the back of a fag packet - get it out of your head and on paper so you can be challenged and questioned by people who care. Six pages, ten pages, one page - do as much as you need. As others have said, every hour spemnt on the planning stage, DONE CORRECTLY, will be worth thousands to you in the long run.

Back to my old Dad - "If your idea is only in your head, you're still dreaming"

Interesting philosophy! Well if you do decide to have a go at turning those dreams into reality and require funding/business plan, drop Wisteria a call.

 

[Tax-UK]

As long as you have a good idea of how much margin you are making on each sales and your calculations are accurate, a full business plan is only useful for lending requirements. Otherwise a short version to calculate margins etc will suffice

 

[Chris Ashdown]

Tax-uk

So you place no importance to cash-flow, that should be worth a good laugh for your administrator when he comes to answer your call

 

[Tax-UK]

Chris Ashdown

I am not sure what made you believe I said that cashflow is not important.

As long as the margins are healthy, cashflow will be healthy and that goes without saying as any business person with basic experience will be able to tell you.

But you knew that didn't you?

Tax-uk

So you place no importance to cash-flow, that should be worth a good laugh for your administrator when he comes to answer your call

 

[Chris Ashdown]

Because you only stated "As long as you have a good idea of how much margin you are making on each sales and your calculations are accurate, a full business plan is only useful for lending requirements. Otherwise a short version to calculate margins etc will suffice

Margins have nothing to do with Cash-flow, I am astonished you are offering accountancy without understanding Cash-flow, which is the largest reason for companies to fail by a massive amount

You can have great sales and margins but if the cash is late coming in you cannot pay your outgoings, so you get stopped from buying more stock to meet sales and end up with no money, but loads of companies / people owing you money you cannot use as you only have it on paper not cash

But you do understand that don't you?

 

[Tax-UK]

I can see that your main job is to annoy people with idle conversation, while business is just an hobby that you indulge occasionally.

I could write an extensive lecture and play your game 'talk as much as possible to be perceived as someone important' even when your answers clearly indicate that you are someone who has very little business experience, otherwise you would concentrate on the points that real matter for start-up businesses and trust me writing up cashflow plans is the least of their worries.

You seemed to have got lost in your thoughts, so let me remind you that the question was if it was possible to operate a business without writing a business plan, to which i replied it would be possible as long as the margins are right. I didn't do like you and started writing a long list of pointless items which are only useful as an ego booster (probably you have a mirror next to your PC so that you can keep admiring yourself constantly) and in no way answered the question posted.

Margins are the keystone for any successful business, any idiot with basic knowledge does know there is more to business life and other factors to consider. However you are so busy on boasting your self-esteem that you feel inclined in patronizing other people's comments. I suppose that is what beer does to you at the end of another day staring at your image in the mirror with no sales or cash in the bank.

PS- Do me a favor if you see any other post written by myself and feel tempted, please don't just keep drinking your beer or go and annoy someone else

Because you only stated "As long as you have a good idea of how much margin you are making on each sales and your calculations are accurate, a full business plan is only useful for lending requirements. Otherwise a short version to calculate margins etc will suffice

Margins have nothing to do with Cash-flow, I am astonished you are offering accountancy without understanding Cash-flow, which is the largest reason for companies to fail by a massive amount

You can have great sales and margins but if the cash is late coming in you cannot pay your outgoings, so you get stopped from buying more stock to meet sales and end up with no money, but loads of companies / people owing you money you cannot use as you only have it on paper not cash

But you do understand that don't you?