A guide to business planning for small business. Lets start your business journey. For a FREE downloadable version please visit www.incrementa.co.uk

1. Business Planning

2. • A business plan is a written document that describes
−The business
−Its Objectives
−Its Strategies
−The Market its in
−Financial Forecasts
• There is no one “perfect” business plan template
The Business Plan

3. • Can help spot potential pitfalls before they happen
• Structure the financial side of the business
• Focus your development efforts
• Work as a measure of your success
Why write a business plan?

4. The Contents

5. Where are
you now?
Where do
you want
to go?
How are
you going
to get
there
The Business Plan

6. Where are you now? Where do you want to go?

7. Do you
know?
Who
What
WhyHow
When
The Business Plan

8. Where are you now?
Who
What
Why
When
Your customers
Your product /
service
Is there a pain?
Purchase
occasion?

9. Where are you now?
How
How will your
product be used?
How will you let
people know?
How will people
buy it?

10. Questions to ask yourself before you start
1. Can you describe the business...in only one paragraph please?
2. What is your product, or service?
3. Who will buy it?
4. Where should you locate the business?
5. How can you attract customers?
6. What is your competition?
7. How much should you charge for the products or service?
8. What advice do you need and who can provide it?
9. How will you organize the managers and/or workers of the business?
10. How will you split the profits? Who is responsible for the losses?

11. 11. What should you consider to be able to produce the product and get it to the
customer?
12. How much money is needed to get the business started?
13. How many customers will you have per month and how much will they buy per
month?
14. How much does it cost to make the product or provide the service?
15. What are your operating costs? (Include your own salary)
16. How much money will your business earn each month by selling your product or
service?
17. How much investment will you need to keep the business going until you make a
profit?
18. What is your potential profit per year for Year I, Year II, and Year III?
19. How much money do you need to borrow to start this business?
20. How will you make the business grow in the future?

12. 1. Executive Summary
2. Market Research
3. Products and services
4. Marketing and Sales
5. Operational Plan
6. Management
7. Financial Plan / Forecasts
The Contents

13. • A synopsis of the key points of your entire plan.
• Its purpose is to explain the basics of your business in a way
that is interesting and informative
• It should be concise – no more than 2 pages.
• This section should be written last
Executive Summary

14. What its not
• A brief description of the business and its products. It is a
synopsis of the entire plan
• An extended table of contents
• Hype. It should excite but do not overly hype your
business / idea
Executive Summary

15. • How large is the market?
• Is the market growing or shrinking?
• Are there any barriers to entering the market?
• Who are my competitors?
• What goods / services are they offering and are they better than
mine?
• Who are my customers?
• What do they want?
• Where do they want to buy?
Market Research

16. • Most owner managers decide to react to market demand rather
than forecasting and planning
• Simple common sense tells us the more we know about our
customers and our markets there is more chance of maximising
opportunities and minimising risks

17. What do we want to find out
Wider world
Industry
Competition
Customers

18. • Competitor analysis has several important roles in strategic
planning:
− To help businesses understand their competitive
advantages/disadvantages relative to competitors
−To help forecast the returns that may be made from future
investments (e.g. how will competitors respond to a new
product or pricing strategy?
−To provide an informed basis to develop strategies to achieve
competitive advantage in the future
Competition

19. Factor Me Strength Weakness
Competitor
A
Competitor
B Importance to Customer
Products
Price
Quality
Selection
Service
Reliability
Stability
Expertise
Company
Reputation
Location
Appearance
Sales Method
Credit Policies
Advertising
Image
Competitor Analysis

20. • Describe in depth your products / services – any technical
specs, drawings, photos etc should be placed in an appendix
• What factors will give you a competitive advantage /
disadvantage. For example what is your Unique Selling
Proposition?
Products / Services

21. • This section should describe the specific activities you intend to
use to promote and sell products and services. Its often the weak
link in business plans.
• A strong marketing and sales section means that you have a clear
idea of how you will get your products and services to market
• Its important to remember that the focus of marketing is people.
The term “Target Market” is used because that market is the “bulls
eye” at which you aim your marketing efforts.
Marketing and Sales

22. Marketing and Sales
Who
What
Why
When
Your customers
Your product /
service
Is there a pain?
Purchase
occasion?

23. Marketing and Sales
How
How will your
product be used?
How will you let
people know?
How will people
buy it?

24. Marketing and Sales
Who
What
Why
When
Your customers
Your product /
service
Is there a pain?
Purchase
occasion?
How
How will people
buy it?
Segmentation
Product
Price?
Promotion
Place

25. Marketing and Sales
Customers (potential customers)
• Who are they?
• What are they prepared to pay?
• What do they like about your product?
• What do they dislike?
• How frequently will they buy
Angle Tip
When carrying out potential customer
research its important to first identify
who your potential customers might
be. Don’t waste your time asking
people their views on products or
services that they will not buy.

26. Segmenting consumer markets
Consumer Segmentation
Behavioural Psychographic Profile
Benefits
Sought
Purchase
Occasion
Purchase
Behaviour
Usage
Perceptions
And
Beliefs
Lifestyle Personality
Demo
graphic
Socio
economic
Geo
graphic

28. Segmenting organisational markets
Organisational Segmentation
Microsegmentation Macrosegmentation
Choice
Criteria
Decision
Making
Unit
structure
Decision
Making
process
Purchasing
Organisation
Company
Innovation
Company
size
Industry
Geo
graphic

29. Do you know who your customers are?

30. Buyer Roles
Buyer
User Payer

31. What are the roles associated with each of these products?

32. Which role do you target and why?

33. Promotion
Publicity
Direct Marketing
Personal
selling
Advertising
Sales Promotion
Internet/websit
e
Online marketing
Face to face
(Trade shows)

34. Which promotional methods do you use and why?

35. Explain your methods of setting your prices. For most small
businesses, having the lowest price is not a good policy.
−It decreases profit margins
−Customers may not care
−Large competitors can just undercut you anyway
−You will usually do better to compete on quality and service
• Does your pricing fit with the competitive analysis?
• Compare your prices with those of your competitors
• How important is price as a competitive factor?
Pricing

36. • Price and Quality relationship
−Price often sends quality cues to customers
High
High
Low
Low Price
Quality

37. Pricing new products or services
High
High
Low
Low
Promotion
Price
Rapid Skimming
Rapid
Penetration
Slow Skimming
Slow
Penetration
Premium products
Gradual entry
Premium products
Quick entry

38. Plus
Cash flow
Sales
Forecasts
Profit and
Loss
Financials

40. • Begin by asking these questions:
− Your Sales
−How many items do you think you will sell? Be realistic - if you
overestimate, it will cause you problems in the future.
− The cost of sales
−How much will it cost you to make each item- ie costs of materials,
components or subcontractors to make the product or supply the service?
− Fixed Costs
−Do you have to pay any other costs, rent, phone costs, etc?

41. What your budget will need to include
• Projected cash flow - your cash budget projects your future cash
position on a month-by-month basis.
• Costs - typically, your business will have three kinds of costs:
− fixed costs - items such as rent, rates, salaries and financing costs
− variable costs - including raw materials and overtime
− one-off capital costs - for example, purchases of computer equipment or
premises
• Revenues - sales or revenue forecasts are typically based on a
combination of your sales history and how effective you expect your future
efforts to be.

42. Sales Forecast
• Your sales forecast should be based upon any historical sales, your
marketing strategic and your market research.
• A sales forecast is an essential tool for managing a business of any size.
• It is a month-by-month prediction of the level of sales you expect to
achieve.
• Most businesses draw up a sales forecast once a year.
• You may wish to do two
1. A best guess – what you really expect
2. A worst case – your lowest estimate no matter what

43. • typical examples of assumptions:
− The market you sell into will grow by 2 per cent.
− Your market share will shrink by 2 per cent, due to the success of a competitor.
− Seasonality – how sales will change depending on the time of year
− You have new products that have the potential to increase sales rapidly.

44. Now that you have laid down all of the details about your
business – the customers, the market, the pricing etc – it is
time to do some predictions.
Your sales forecast should be based upon any historical sales,
your marketing strategic and your market research.
You may wish to do two
1. A best guess – what you really expect
2. A worst case – your lowest estimate no matter
what
Sales Forecast

45. MONTH SALES a SALES
b
SALES
c
TOTAL
MONTH
MONTH CUMULATIVE
MONTHLY
1
2
3
4
5
6
7
8
9
10
11
12
YEAR
Sales Forecast

46. Explain the daily operation of the business, its location,
processes, people, equipment
• Sales
− How will you sell your product / service
− Credit terms
• Production
− How will you produce your product / service
− Quality Control
− Customer Service
− Product development
• Location
− Where will you sell / produce your product
Operational Plan

47.  Research, research, research
Gain a thorough understanding of the market
 Understand the customer
Where possible carry out primary research – is it something that people will want to buy?
 Attention to detail
Make the plan concise and make shaw their are no spelling mistakes!
 Executive summary
Your chance to sell the idea. Give it a “wow” factor which will encourage people to read
more
 Do the maths
Make sure the numbers add up, are realistic and can be justified
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