The Art of Business Planning for Start-Ups
Royce, LIT’s LEAP Programme Manager explains how and why business planning is more than simply writing a business plan.
Business planning is the essential process of thinking about your business concept, about your customers and why they are going to buy your product and not your competitors. A business plan is the best way to ensure that you – the business promoter(s) – are clear about what you want to achieve.
The first thing to remember about business plans is that they should not be set in stone. The primary function of a business plan is to clarify the business purpose. Start by answering a series of questions relating to: the business concept and the customer need; the target market and the route to market. Having assessed these aspects of the opportunity one can then move on to critically evaluate the management team and the financials of the business opportunity. A solid business plan, accompanied by a professional presentation, provides compelling reasons why the investor should invest in the future of the company. Importantly, the business plan can be a key factor in convincing key business partners and potential employees to join your team.
A key task for every entrepreneur is to set short and long term objectives for the business. While business plans do not tell you how to run your business, they provide a series of forecasts and projections particularly in terms of Sales revenue, cashflow and profit that provide the platform to benchmark progress. The value of a business mentor is often the ability to stand back, ask the challenging questions and help the business promoter to set priorities and identify key milestones for their business.
Use a Template
The business plan has to be written by the business promoter – with guidance and advice from selected experts and mentors. A template will provide a structure for the document. You will find a business plan template online in the Information Centre of the Enterprise Acceleration Centre website @ www.eac.ie. This template, used by Enterprise Ireland for High Potential Start-Ups, suggests 11 distinct sections:
1) Confidentiality Agreement
2) Executive Summary
3) Company Description
4) Market analysis
5) Marketing/Sales Strategy
6) Research & Development
7) Staffing and Operations
8) Financial Projections
9) Sales Pipeline
10) Funding Requirements
11) Appendices
As part of the management development training on the LEAP programme we invite successful business people from the region to share their experiences. One of our recent guests, who started a business 15 years ago that is now a market leader, noted that when he started it was called ‘being self-employed’ and that now Ireland is full of entrepreneurs. This highlights the positive attitude which now exists for those willing to embrace the challenge of establishing an enterprise. Make no mistake – running a business is complex and challenging. That’s why it can be so rewarding. Remember it is never too early to start the process of business planning. For more on the LEAP programme visit www.lit.ie/leap