Name of your business

Business Plan

Your name

Month & Year

 Contents
Name of your business....................................................................1

Business Plan..................................................................................1

1. PURPOSE OF PLAN AND SUMMARY................................................4

2. BUSINESS & CONTACT DETAILS....................................................5

3. PRODUCTS & SERVICES................................................................6

4. THE MARKET.................................................................................6

5. PEOPLE INVOLVED........................................................................9

6. PREMISES.....................................................................................9

7. LEGAL...........................................................................................9

8. SUPPLIERS..................................................................................10

9. QUALITY ISSUES..........................................................................10

10. INFO TECHNOLOGY...................................................................10

11. ENVIRONMENTAL......................................................................10

12. BUSINESS OBJECTIVES & YOUR VISION FOR THE FUTURE..........10

13. CAPITAL EXPENDITURE.............................................................11

14. INCOME....................................................................................12

15. DIRECT COSTS..........................................................................13

16. OVERHEADS.............................................................................14

17. FINANCIAL CONTROL & CASH FLOW..........................................16

18. FINANCIAL PROJECTIONS..........................................................17

19. ACTION PLAN............................................................................18

20. APPENDIX.................................................................................20
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• Remember to delete these instructions!

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Some hints for writing your business plan

• Start with sections that you’ve got plenty to say about, like “Products and services” or
“Customers”. Business plans are a bit like jigsaws – start with the easy bits – the
edges. You’ll eat the elephant one bite at a time!

• Pretend the reader is from Mars! Assume they know nothing, so explain everything.

• Keep the plan objective. Write it in the “third person”: instead of saying “I will have
flyers made”; say “Flyers will be made”.

• There are plenty of risks in business. So say what they are and how you can deal with
them.

• Give full answers. If the answer to “Who are your customers?” is “Truck drivers in
Aberdeen”, write “My customers are truck drivers in Aberdeen”

• Read your business plan every month. What has changed? What needs to be
updated?

• Show your business plan to others who can help make your business even better.
What do they suggest? Ask them to make helpful suggestions.

• Be careful who you share your business plan with.

• Another way to start a business plan: buy a lever arch file, and some card dividers.
Make each divider a different section of the plan, i.e. a divider called “Premises”, one
called “Marketing” and so on. Then just collect notes, scraps of paper, as you go
along.

• Do a different version of the business plan for anybody who needs to see, like funders.
Keep a “working version” for yourself.

• The template here is just a guide. If it doesn’t meet your needs, change it!

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1. PURPOSE OF PLAN AND SUMMARY

Why are you writing this plan?

Who needs to see it?

Do you need to access funding?

Do a short description of your product or service, legal status, target customers, staff,
premises etc. - half a page at the most.

After reading this somebody should have a clear idea what your business will do.

List of things I still need to do:

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2. BUSINESS & CONTACT DETAILS

Business Name
What is your business name? (Or proposed name)

Contact Name
What is your name?
Also your date of birth & age next birthday - may be useful for grants

Address (Home & Business)

Home:
Business:
For limited companies, where is your registered office?

Telephone No. (Home & Business)

Home:
Business:
Mobile:

E-mail address (Home & Business)

Home:
Business:

Website
What is your website address?

Legal Status
What type of business will you have - sole trader, partnership, limited liability company?
Will you be VAT registered?

Date of start or proposed start

When do you plan to start? (Or approximate start date)

Names of partners or other directors

For partnerships, name the other partners.
For limited companies, name the other directors.

Qualifications
What qualifications do you have?
List them all, even if they don’t seem directly relevant to your business.

Work Experience
What have you done in the past?
What business or management experience did you gain?
If you previously ran your own business, write a short summary about it
Put your CV in the appendix

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Advisers Consulted
Who have you spoken to about your proposal?
Accountant: e.g. John Smith, JS Accountants, Aberdeen
Solicitor:
Bank manager:
Business Gateway advisor:
Other business owners:
List of things I still need to do:

3. PRODUCTS & SERVICES

What products or services will you offer? Be specific!

What stock, raw materials or consumables will you need?
If you make things, how will this be done?
List of things I still need to do:

4. THE MARKET

Market research
What market research have you done - talking to customers, questionnaires, looking at
market reports?
How do you know that a market exists?
How do you know that customers will buy from you?
As a result of the research, how are you going to proceed?
List of things I still need to do:

Customers
What type of customers are you targeting?
Be as detailed and precise as you can.
What do your customers have in common?
Age? Male/female? Location? Lifestyle? Disposable income?
If you are selling to businesses, what type and size?
How are your customers using new technology?
List of things I still need to do:

Geographical area covered

How far away will customers come from?
How far out will you go from your base?
How will you manage travelling time?
List of things I still need to do:

Size of market
How many potential customers are there for your business within your area?
How big a slice of the market are you planning to deal with?
Is the number of customers expanding, static or declining?
If static or declining, how will you get more business?
List of things I still need to do:

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Competitors
Who do you compete with head-on?
Who are your indirect competitors?
Where are they located?
Have you reviewed their strengths and weaknesses?
If you have a few close competitors that you can name, review the strengths &
weaknesses of each.
If you have lots of competitors, review the strengths & weaknesses for each type of
competitor, e.g. “national competitors”, “regional competitors”, “local competitors”.
How can you develop a competitive advantage over them?
List of things I still need to do:

SWOT Analysis
This is a review of the strengths, weaknesses, opportunities and threats facing you and
your business.
Be honest!
Don’t undersell yourself.
Get a friend to do a SWOT on you.

Some ideas:

Internal strengths External opportunities

• I have excellent experience in the trade
• I like working with customers
• I have a good appreciation of pricing &
quotes
• I have lots of contacts in the trade –
other tradesmen and engineers
• I have a good knowledge of suppliers
• I have a good knowledge of customers
in the local area
• I have received excellent training
• I am already in the industry association
• I enjoy networking with people
• I have a good knowledge of the IT
industry
• Setting up annual maintenance
contracts
• I can work with other sole traders
• I can work with other consultants on
larger jobs
• Looking for subcontracting from other
companies
• Potential of a contract from the local
authority

Internal weaknesses External threats

• I will be a sole trader – working by • New competitors setting up
myself – so there is a limit to how much • Any changes to legislation that might
I can take on affect my industry
• I don’t know much about bookkeeping/ • Changes in employment legislation
accounting – I will need an accountant • Downturn in the oil industry in Aberdeen
• I need to find out more about marketing
and selling
• My monthly overheads are high
• I don’t have much finance
• I need to learn about managing staff

How can you…

• Make the most of your strengths?

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• Overcome your weaknesses?
• Make use of the opportunities?
• Keep an eye on the threats?

Why will customers buy from you and not from your competitors?
How will you be different from your competitors?
List of things I still need to do:

Pricing
How did you arrive at your pricing?
Give examples of your prices.
What margin will you make?
Which products or services will make the most money?
Will you use a price range, e.g. economy, regular and luxury?
Have you thought about an hourly rate, price per job, charging for travelling time?
List of things I still need to do:

Distribution
What “sales channels” will you use to get your product/service to your customers?
Will you sell directly to them, from a shop, internet or some other method?
If you are selling products and also deliver to customers, how will you do this?
What transport needs do you have?
What post or courier services will you need?
Are you going to be importing or exporting?
List of things I still need to do:

Design and packaging

How will you package your products?
Will you use a brand, logo, typeface?
What design will your stationery, vehicles, premises and uniforms have?
Put examples in the appendix
List of things I still need to do:

Promoting & selling

How will you promote your business – direct marketing, advertising, sales promotions,
fliers, publicity & PR, personal selling?
Where will you promote - particular towns, newspapers, housing estates?
What message will you put across?
Do you have a calendar of promotional activities?
How can you target customers for personal selling?
List of things I still need to do:

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5. PEOPLE INVOLVED

Who will be involved in the business? What will they do?

What things will you contract out - bookkeeping, lawyer, employment law?
What employees will you take on now? In the near future?
What positions will they hold and what will they do?
How much will you pay them?
How will you recruit them?
What training will they need and how will you train them?
List of things I still need to do:

6. PREMISES

Where will you operate your business from? Home or business premises?
Describe the location & layout of the premises - number of rooms, facilities, equipment
Have you obtained the necessary permission for working at home?
Have you already obtained business premises?
What rent and rates are involved?
Is the property owned or leased? How long for? When is it renewed?
What conversion work is needed? When will this be done?
List of things I still need to do:

7. LEGAL

What insurances do you need e.g. public liability, product, professional liability, vehicle,
stock, equipment, accident or key man insurance?
Do you need planning permission or building warrants?
Are there any licensing or environmental health issues?
Do you need to pay any association, membership or certificate fees?
Are there any other legal requirements specific to your business?
What arrangements do you have for HMRC, Companies House, income tax, NI, VAT?
Have you registered for Data Protection or playing music?
What Health & Safety issues do you need to deal with?
What other licences or contracts do you need?
How will you work with your lawyer?
List of things I still need to do:

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8. SUPPLIERS

What suppliers will you need?

What have you agreed about prices, volumes, discounts, payment methods, payment
terms?
Have you checked their prices with other suppliers?
List of things I still need to do:

9. QUALITY ISSUES

Do you need to be involved in any quality programmes?

Will ISO9002 be relevant to your business?
Will you be an “Investor in People”?
Will your business be inspected by any external organisations?
List of things I still need to do:

10. INFO TECHNOLOGY

What computing needs do you have?

How will you use new technology in your business?
Have you taken steps to back up your information?
List of things I still need to do:

11. ENVIRONMENTAL

Do you have waste products to dispose of - food, oil, tyres, grass cuttings, water?
What can you recycle?
Are you aware of legislation?
Do you need to consider noise or pollution aspects?
List of things I still need to do:

12. BUSINESS OBJECTIVES & YOUR VISION FOR THE FUTURE

What turnover and profit do you plan to achieve, year by year?

Do you plan to introduce any additional products or services, staff, premises, equipment?
When will these be introduced?
How will you finance them?
List of things I still need to do:

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13. CAPITAL EXPENDITURE

What assets will you bring to the business - computer, vehicle, tools and equipment?
List everything and put it in the appendix
Estimate the realistic second hand value (not what you paid for them).
What new things will you need?
Where and when you will get them?
How much will they cost? How will you buy them?
What IT and communications equipment will you need (e.g. phone, fax, computer)?
List of things I still need to do:

Examples:

I have most of the tools & equipment needed and the second hand value is about £300.
The equipment is listed in the appendix; I will use this list to work out the tax allowances at
the year end.

I will need to buy about £1,200 worth of equipment in the first month (e.g. additional hand
tools, test machine).

Tools & Equipment (own already) £300

Tools & Equipment (need to buy) £1,200
Van (need to buy – financed) £5,000

TOTAL £6,500

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14. INCOME

How much are you selling for each different product or service?
How much are you planning to sell in each month?
Will your business have seasonal ups and downs?
When will you will be busy, such as summer time or Christmas?
When will you be quiet, such as New Year & January?
When are you planning to take time off for holidays?
How will you cover costs during this time?
List of things I still need to do:

If you are applying for the 18-30 grant, you need to do projections for the first year of your
business.

You also need to show how you arrived at the figures - use these examples as a guide:

My income is based on 10 sales x £200 every month for the first 3 months, rising to 15
sales after that. June and December sales are reduced due to holidays (mine and my
customers’). Lower sales are expected in late Aug & Sep. My market research & previous
experience indicates these are slow months for this kind of business

My forecasts are based on the following number of chargeable hours per week:
- 20 in Sep (average 2.9 days a week working)
- 25 in Oct (average 3.6 days a week)
- 30 in Nov (average 4.3 days a week)
- 25 in Dec & Jan (back to 3.6 days a week)
- 35 hours a week after that (5 days a week working).

This increase in hours takes account of building up the business. In reality I plan to work
about 6 days a week. There is enough demand locally for me not to have to make distant
trips which waste time.

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15. DIRECT COSTS

What costs are incurred only in producing your products & services?
This varies from business to business, but is often stock, raw materials, wages or rent.

Example:

Stock and raw materials is estimated to be 10% of the sales figure; this is based on my
previous experience.

An allowance of about 32%+VAT will be made for raw materials, sundry gas fittings and
PTFE tape etc. This will vary depending on whether the customer wants to buy the parts,
or get me to source them, and the kind of jobs I am doing. For example, refitting all the
radiators in a house, with me buying the materials, will mean a vastly different stock figure
to repairing a gas cooker, for example. The stock figure might be over-estimated but this
will cover all eventualities. Gross profit works out to be about 70%.

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16. OVERHEADS

Overheads are any other costs.

Explain what each one is.
How did you arrive at the figures? Are they firm quotes or estimates?
List of things I still need to do:

Examples:

Employee wages
Wages are shown as £1,000 each for both of the Full Time staff.

Rent & Rates

Rent is £582 a month, and rates £100 monthly.

Heat Light & Power

£120 has been allowed for the use of part of my flat a room for doing administration,
preparing invoices etc (based on advice from HMRC).

Phones & internet

An amount of £30 per month has been provided for my mobile phone.

Insurances
An allowance of £200 has been made to cover public liability and stock insurances. This
is based on a quote from the insurance company.

Marketing & Promotion

£300 covers the cost of fliers, business cards, initial newspaper advert & vehicle signs at
start up, and £20 per month after that to cover further flyers and advertising when needed.

Misc., sundries, other

£30 a month for office sundries, receipt & invoice books, postage etc, and unexpected
costs.

Travel & Motor Expenses

I have assumed that I will use £2,000 of fuel in the year (about £38 a week). I have
assumed that vehicle insurance will cost £600, servicing £500 and road tax of £175.

Bank charges
The bank has confirmed that there will be no charges in the first year, and we have
discussed likely charges for the second year.

Loan repayments & interest

The loan repayments are £350 and interest £50 monthly.

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Accounting & legal fees
I will maintain my own bookkeeping records but I have allowed £200 for John Smith
Accountants to prepare my self-assessment tax returns at the end of the year. The
customer contract template will cost £50 from JS Legal.

Repairs
An amount of £20 a month has been allowed for repairs to machines & equipment.

Training
To keep my training up to date, I will spend about £500 in additional courses every year.

Depreciation
Both the equipment and the van will be depreciated at 25% of the remaining values every
year.

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17. FINANCIAL CONTROL & CASH FLOW

Have you done a “personal spending budget” to see how much money you need to live on
every month?
What is the minimum amount of sales that you need to break even?
If your drawings are low initially, how will you support yourself?
If the cash flow shows negative figures, how will you deal with this - bank overdraft,
personal savings?
How long will customers take to pay?
How will you do credit control?
If you run a limited company, what split of salary & dividends will you have?
How will you save up for the tax & NI bill?
Do you need to borrow money? How much do you need?
Where will you borrow it from? Over what period and interest rate?
Are you eligible for any grants?
Have you taken on a bookkeeper or accountant?
How will you work with them?
What stock will you have at the end of the year?

List of things I still need to do:

Examples:

Customer Credit
My payment terms are payment in 30 days. I anticipate that customers will pay by cheque
on delivery. Deposits will be taken for large jobs to cover materials. I will also charge
interest on late payments and offer discounts for early payment.

Stock
I plan to hold stock of consumables worth about £150 at any one time.

Payments to Suppliers
I have assumed that no credit is available from my main suppliers for the first 3 months. I
will then approach them to inquire about credit accounts.

Personal Drawings
I anticipate that first year drawings will amount to £15,000 after tax and N.I. The cash flow
shows a minus figure of £600 in January; I will rely on my personal savings in this month.

Director’s salary and dividends

My salary will be £15,000 and a further £10,000 will be taken as dividends.

Tax and N.I. Contributions

Based on the cash flow I have made an estimate of the net profit at the end of my first
year of trading. I have accounted for about 25% of the net profit to cover the tax & NI bill.
This is shown as a monthly cost on the cash flow; the money will be placed in a high
interest/instant access account.

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Owner’s capital & financing
I am starting the business with £2,000 of my cash plus the equipment listed. To buy the
vehicle I have secured a bank loan of £5,000 over 3 years at 7.5%, with a monthly
repayment of £xx and interest of £xx. My bank has also agreed to an overdraft of £2,000.

Security against borrowing

I have offered my bank a savings policy to cover the security they need for the overdraft.

18. FINANCIAL PROJECTIONS

Your advisor will help you complete these projections

The cash flow forecast is a calendar of cash that flows in and out of your business. It will
help you to estimate shortfalls and get more sales, reduce spending, or borrow money
when needed.

The profit & loss shows how much profit you will make. The net profit is what you’ll pay
tax on.

The balance sheet shows the value of your business, your assets and liabilities.

Insert copies of these 3 forecasts here.

List of things I still need to do:

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19. ACTION PLAN

What needs to happen next?

Make a calendar list of the things you will do over the coming year – this will help you to keep you on track.
Use this table as a guide - remove the parts you don’t need, change or add in other parts.

Months 1 2 3 4 5 6 7 8 9 10 11 12
Business set up Set up
limited
company
Products/services

Suppliers Set up
agreemen
t with S&S
Supplies
Legal issues Lawyer to do
contracts
Market research Continue
questionnaire
s
Pricing

Promotion

IT issues, website

Insurance Renew
car ins.
Tax, NI, VAT Register with
HMRC
Months 1 2 3 4 5 6 7 8 9 10 11 12
Banking Set up
17/05/2011 Page 18
 business
bank
account
Finance Arrange
£5,000 loan
Premises

Employees Take on
employe
e
Contracts

Networking

Selling activities

Book keeping,
accounting, cash
flow
Tools & equipment

Environmental

Quality schemes

Sales targets &

review
Other

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20. APPENDIX

Put things in the appendix to avoid the main part of the business plan getting cluttered up.
The reader can refer to them if they need to.

Things you can put in the appendix might include:

• CV
• Results of your market research
• Competitor literature & info
• Personal spending budget
• Breakeven analysis
• List of equipment already owned
• List of equipment needed
• Supplier quotes
• Contracts
• Leases
• Qualification & training certificates
• Risk analysis

Personal spending budget

How much money do you need to live on - exactly?
Your advisor can give you a spreadsheet table to work out your weekly, monthly, quarterly
and annual costs.
Include any other income into the house e.g. from partner
Put a copy in here

Breakeven analysis
How much money do you make to break even?
How many sales or pieces of work will you need?
Your advisor can help you to work out the minimum you will need.
Put a copy in here

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Equipment already owned
Use this table as a guide.

Item Cost new Value now Useful life

Computer £1500 £500 Another 2 years

TOTAL £

Equipment still required

Use this table as a guide.

Item Cost new Buy using Useful life

Van Approx £8,000 HP from dealer 5 years
(£200 a month)

TOTAL £

Risk analysis
You might find this is useful to add in. Far from concentrating on “doom & gloom”, this
can show funders that you have thought things through and taken sensible steps to
protect your business in the event of certain things happening.

Item Chances of happening How I will deal with it

Failure of my main supplier
Steep rise in interest rates
Low. They have been
trading for 20 years, I have
checked their accounts on
Companies House website
Medium
I have approached other
suppliers and agreed terms
in principle. I will keep
checking my main supplier’s
accounts.
I will keep a close eye on
this. Increase marketing of
other services should this
happen.

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