Deborah Wyatt from Business Link outlines the key stages of writing a successful business plan.
Business Linkis a government network run by the Department of Trade and Industry that provides practical and impartial guidance for new and existing small and medium-sized enterprises.
When you're starting up a business, it is essential that you put together a realistic working business plan that reflects the area of the catering industry you are entering. A business plan is a written document that describes the business, its objectives, strategies, the market it is in and financial forecasts.
There is a tendency to view business plans simply as a means of securing external funding. Although it plays an important role in attracting potential investors, there are other reasons for creating and following a business plan.
It can support your new catering business through all the stages of the life cycle as well as help you spot any potential pitfalls, structure the financial side of your business efficiently and, in future, help you focus your business's growth.
Remember, your plan is also a working document that should be updated as your business grows and develops - it is easy to get caught up in the running of the business. Use it to give your business direction and focus on where you are and where you want to be.
What to include
Business plans are a statement of intent, aiming to give details of how you are going to develop your business. Before you begin, remember that the person reading the plan may not understand the catering business and its products and services as well as you do, so it's important to avoid jargon. To get the best out of your business plan, remember to include the following sections.
Executive summary This is an overview of the business you intend to start. Anyone looking at your business plan will read this section first, so try to set the right tone from the outset. Many lenders and investors make judgments about your business based solely on this section of the plan.
Although positioned as a summary at the front of the document, it makes sense to write this part of your plan last as it includes a lot of content from later sections. Typically it will include around 500 words.
You might want to think about this section in two parts. The first part will set out your vision for your new business detailing who you are, what you do, what you have to offer and the market you want to address.
This will lead you smoothly into the next part, which outlines your customers and competitors. Start by defining the catering market, your position in it and who your competitors are. Make sure you demonstrate that you're fully aware of the marketplace you're planning to operate in and that you understand any important trends and drivers.
- Your marketing and sales strategy In this section, highlight why you think people will come to you and how you plan to sell to them. Include the specific activities you intend to use to promote your catering products and services, such as PR, direct mail or advertising, and how you will price your offering in the market.
- Your team
Describe your management structure, and your team's key skills, highlighting any particular strengths. Also address any obvious weaknesses in your team by letting the reader know you plan to deal with them by providing a training programme, for example.
- Your operations It is here that you must detail your business's physical assets. Whether you already have premises or need to find somewhere, provide information on your requirements, including any production facilities. In addition, you will also need to outline any IT systems you have to set up for your new business.
As part of your plan you will need to provide a set of financial projections putting what you've said about your business into numbers.
Look carefully at how much capital you need, the security you can offer lenders, and sources of revenue and income. It is vital to consider your likely cash flow as well as your profitability, especially in the early days when costs are high and income streams are building. In some cases, you may also want to include your personal finances to show how you will stay afloat during the early days.
Finally … Keeping your plan short and clear will make it easier to read and understand. A well presented plan will reinforce the positive impression you want to create for people to have confidence in your business. As mentioned earlier, your business plan should be a working document, so make sure you review and update it as and when you need to.
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