Creating your business plan and pitch is the final step in your entrepreneurial journey. You have accumulated a wealth of information so far, all of which will inform your final pitch and plan. Your business plan enables you to evaluate your business start up and resolve any potential problems, before your launch.
Both your plan and pitch will be used to communicate your business idea to potential investors in order to gain funding. It will also be used to educate potential customers about your brand and to encourage them to choose your products over that of a competitor.
The Business Plan
Creating your business plan is the last stage of the entrepreneurial process before launching your business start up. In Element 1 we discussed the importance of a business plan and identified sources that would provide you with the information needed to ensure that it is detailed and knowledgeable.
Your business plan needs to cover all of the vital information that a potential investor or customer needs to know. This can include your business objectives and goals, strategies, marketing and finances.
No two business plans will be the same as the content will vary depending on the business, the products or services offered and the industry. There is, however, some specific information that will need to be included. There are many business plan templates available online to use as guidance, however, it’s important to use your own headings to ensure that you communicate all of the necessary information that relates to your business.
- Be concise
- Be specific
- Know your market
- Know your finances
Structuring your Business Plan
Although every business plan will vary in content, there are some pages and headings that it is vital to include. The title page of your business plan should include your name, the business name and the date of the business plan, this is the same for all business plans. Next, you’ll need a contents page to ensure that readers know where to find specific information. All business plans will also need an introduction that should answer questions such as ‘Why are you writing a business plan?’ and ‘What are you hoping to achieve?’.
After the introduction, you’ll need an executive summary, this is where your business plan will start to differ from others, depending on the headings that you use. Your executive summary should clarify your business idea in a clear and concise manner. It should be no more than a page long and should focus on your USP’s and advantages over competitors. It’s also important to mention financial information in this section to attract potential investors early on.
Headers within this section could include:
- Business summary
- Business aims and objectives
- Financial summary
There is no specific order to your business plan, as you are writing, you will find a logical order in which to include your information. From this point onwards, there are no rules for what needs to be included, however, there are topics that you may want to cover to give yourself the best chance of gaining investment and interest in your business.
- State why you want to own your own business
- Outline your previous experience
- Talk about your qualifications and training and anything that you would like to gain in the future
- What are your hobbies and interests?
- Add any other information that you feel would be interesting and useful for your readers
- Define the market sector or segment and who the end user of your product or service will be
- What needs does your customer have that will determine whether they buy your product? Are there any other products that answer this need? Do those products have weaknesses?
- What will your typical sales margins be? Is this achievable?
- Outline the market potential, how big is it? What is the value? What are the opportunities to gain market share?
- Research your competitors, acknowledge any real threats and identify your advantages
- Are there any case studies available to you?
- Include information relating to your corporate, social responsibilities
- What were your findings from market research?
- Desk and field research
- Primary and secondary research
- Qualitative and quantitative data
- What methods of marketing are you going to use?
- Will you have an in-house marketing department or will you use an external agency
- Marketing budget
- List your competitor’s names, business size, location, products and services offered and prices before analysing their strengths and weaknesses
- Where is your own business weaker or stronger than that of your competitors?
- SWOT analysis of your own business
Operations and Logistics
- How many staff will you need, what will your staffing structure be?
- List any legalities and insurances that need to be addressed
- How much premises will you need, do you need extra storage space and offices
- List your suppliers
- Where will products be manufactured? In-house or are they brought in? If they’re manufactured in house, list the equipment that is needed
- What payment methods will be available to customers?
- You’ll need a document showing the product name, how many units will be made, the components needed to make one unit and their cost, the overall cost per unit, the price per unit, the margin (£ and %) and the markup on every product (%)
- Plan B
- Short term plan
- Long term plan
- Plan for when the business ceases to trade
Critical Success Factors
Critical success factors (CSI), also known as ‘key results areas’ are an important part of any business plan. They’re essential to a business achieving its aims and objectives and aid a start up in continuing to work towards its overall mission.
Your business should have multiple CSF’s, however, they should be limited to no more than 5 to ensure that they have maximum effect. CSF’s ensure that all staff members are working towards to same goals and understand what is most important in your business.
Mindtools gives examples of critical success factors in relation to the mission of a company.
Key Performance Indicators
Key performance indicators (KPI’s) are also an important part of the business plan and overall strategic planning process. KPI’s provide you with a way of measuring the success of your start up, ensuring that you stay on track to achieve your goals. Without the regular assessment of your businesses performance, it’s likely that you will fail to complete your objectives and reach your goals.
Key performance indicators are usually an easily measurable element within an objective, for example, if a sports club wanted to grow it’s membership to 10,000 members within 10 years, the KPI would be the number of members. This figure could be regularly assessed to see whether goals were being met.
Not all KPI’s are as easy to measure, however. Measurements of quality and facilities do not have obvious indicators, but they can still be assessed. For example, to measure the quality of your customer service, you could assess the number of complaints or negative reviews that your company receives.
Business Plan Pitch
Your pitch is the way of verbally communicating your business plan to potential investors and customers. In your pitch, you should aim to sell not only your start up idea but yourself as the entrepreneur in order to gain your audience’s trust. You should summarise your business plan in a concise way, including only the most important points so as not to make your pitch lengthy and uninteresting. Before writing your pitch, you must understand your audience. This ensures that you use an appropriate language and tone to suit them, keeping them interested and engaged.
You may need extra materials to aid your pitch. Use handouts and slides to add a visual element but avoid anything too busy, the audience’s focus needs to be on you and the information that you are giving them.
Finalised Business Plan and Pitch
Before presenting your plan and pitch to any potential investors, review both in detail. Make sure that all of the data that you have included is correct, this is especially vital when it comes to any predicted figures that you have included. Mistakes within your forecasts can be embarrassing and costly to your start up.
You should also check that the language that you have used within your business plan is simple and easy to understand. Complex language that investors find difficult to read will take the attention away from what is included in the plan. As well as your language, make sure that you have been concise and to the point. Business plans that are overly wordy can miss the point, leaving investors none-the-wiser about your start up.
Getting friends or family to listen to your pitch before you present it to investors or customers is a great way to practise and gain feedback. Make sure that it flows well and that you move smoothly from one subject to the next without it sounding forced.
Personalised Development Plan
We created a personal development plan in element 1 to benchmark your own skills against those of successful entrepreneurs. Since beginning your entrepreneurial journey, you may have discovered attributes that you didn’t previously know that you had, or, you may have realised that you are not as strong in some areas as you originally thought.
You should update your personal development plan per what you have learnt about yourself throughout your journey so far. Ask yourself the following questions:
- What skills have I developed so far?
- What areas do I need to develop further?
- Do I need to gain any other skills to successfully manage my start up day-to-day?
Update your personal development plan once you have answered the above questions. Add in your updated skills and knowledge, new goals, timescales and success criteria.
Lifelong Learning and Development
Lifelong learning and development enables you to continually update your personal development plan with new skills and knowledge. It is the process of deliberately and voluntarily developing yourself to gain more and better opportunities in the future. Development can be personal and professional and enables you to increase your understanding, allowing you to make more informed successful decisions.
In an age when technology is advancing rapidly, a lack of knowledge prevents us from developing. Information and knowledge are increasing every day, lifelong learning is essential if we want to keep up. Being an entrepreneur and running your own business doesn’t mean that you should stop your personal and professional development. Continuous learning is essential to ensure that you are the best that you can be, for yourself and your business.
Mentoring and Coaching
Coaching and mentoring are techniques that are used to ensure that an employer gets the best out of their employees by developing them in areas where there is potential.
Although often interchangeable, coaching and mentoring differ, mostly in terms of timeframe. Coaching takes place in the short term, with a set duration and a focus on developing skills within a specific area. In the workplace, mentoring is a long-term technique that focuses on broader development across all areas of the job role or business.
Most businesses will give staff a yearly review to assess areas such as their job role, salary and any concerns. Coaching and mentoring go beyond this, providing on-going participation throughout the whole year. These techniques are highly beneficial for business performance, especially within small businesses and start ups. Developing the talent that is already around you can help:
- Employee retention
- Personal development
- Team efficiency
Many people think that high salaries and benefits packages are the only reason for staff to remain in their current job. Recruitment specialist Michael Page states “Most employees will want to know there’s genuine opportunity for career progression and ongoing development in their role”. Salaries are an important factor to consider when hiring staff or taking a role as an employee, but, with many people more driven by career progression opportunities, coaching and mentoring is an essential part of employee retention.
The coaching and mentoring of less experienced employees by those that have been with the company for a longer period is vital to their personal development both in their role and in the organisation in general. Coaching and mentoring not only guides an employee along their own career path but, ensures that they fully understand the expectations of the company. These techniques also help to build trusting, confidential relationships, ensuring that all staff members have people to talk to should they have any issues or concerns.
Having experienced staff coach or mentor new additions promotes teamwork within the organisation. These techniques also help managers to understand the strengths and weaknesses of each employee, enabling them to position individuals in the correct roles. This maximises both efficiencies within the business and job satisfaction for staff.
You’ve done it!
You’ve finished all elements of the entrepreneurial, start up journey, and are ready to use your final business plan and pitch.
You now have a concise, effective business plan that includes hard facts and vital data to inform potential investors. Your pitch is well structured, targeted specifically for the audience and communicates all the key points from your business plan. You’re now able to use both your plan and pitch to gain funding, interest and support for your start up.
If you haven’t yet started your entrepreneurial journey, we hope that our blog series has given you the confidence and inspiration that you needed as we’d love for you to join us. Start your business start up journey today and enrol onto our ABE Level 3 Certificate in Business Start Up or, contact us for more information.