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Fax
020 7543 1200
Email
info@princes-trust.org.uk
princes-trust.org.uk
Or call 0800 842 842.
DSN0710 ©The Prince’s Trust 2009 - all rights reserved. The Prince’s Trust is a registered charity, number 1079675,
incorporated by Royal Charter. The Prince’s Trust Trading Ltd, a company registered in England no. 3161821.
Welcome
The Guide
You’ve got a business idea. You’ve decided to start a business.
You want to get going.
But there’s a lot more to a good business than a good idea. You
need to think things through to maximise your chances of success.
Are you the right person to run the business? Will customers like
your product?
A business plan will help you turn an idea into a business. It needs
you to think through all the parts of your business, to plan how
everything will work. It will take a few weeks to write if you’re going
to do it properly. Some parts will be easier to complete than others.
Stick at it because it’s not the final document that’s important, it’s
the process. Although you want to have a good plan when you’re
done, an OK plan is better than no plan.
The best business plans aren’t long and It’s best to tackle a business plan in The pack is also available electronically.
complex; they explain only the most small chunks. The Prince’s Trust Business Some of the sections of The Business Plan
important information – what you want Plan Pack can help. The pack divides a have tables to record the financial parts of
to achieve, how you will get there and business plan into sections. This is The your business. The tables are also available
the things you need to do along the way. Guide that explains the different information in MS Excel format and the sums in these
that is needed for you to complete The are automatic.
Business Plan.
The Prince’s Trust has helped many young To take part, the most important thing We can’t guarantee that your business
people to complete their business plans you need is a business idea. The programme will work or that we will be able to offer you
and start their own businesses. If you are can then help you to see if your business money, but if you are up for a challenge and
aged 18–30 and unemployed or working idea will work. If through this process you want our help to explore your business idea,
fewer than 16 hours per week, then we find out it will work, the programme can offer get in touch and come and meet us.
might be able to help you. We have offices you mentoring support and,if you really need
throughout the UK and in each there it, money to start your business. However, if
is a team of Business Programme staff. self-employment turns out not to be the right
option for you at this time, the programme
can support you to secure other goals, for
example a job or a place in college.
Contents
Section one
The quick pitch 04
Section two
All about you 05
Section three
What are you going to sell? 06
Section four
Who are your customers? 07
Section five
How will you contact your customers? 08
Section six
Do you know what it’s like out there? 10
Section seven
Who are your competitors and how do you compare? 11
Section eight
How will customers get the goods and you get paid? 12
Section nine
How much will it cost? 13
Section ten
How much money will you make? 14
Section eleven
Business words explained 17
02
“ I found my mentor an invaluable part of the Business
Programme. I believe my new confidence and staying
power is down to the reassurance and motivation
given by my mentor.”
Richard Smith
03
Section one
Executive summary
Purpose of this section How to complete this section
This is the most important part of your Do not complete this section until you
business plan because if someone is busy, have finished the rest of your plan.
this might be the only section they read.
Please follow the steps outlined in the
It should explain the basics of your illustration below.
business. After reading it, the reader
should understand what the business is
about and be keen to know more. It should
include the key points of your business
plan and should be short – no longer
than two pages.
04
Section two
Owner’s background
Purpose of this section How to complete this section
This section is to explain why you want You should attach a CV for each person
to start your own business and why you involved in the business and include copies
think you (and, if applicable, your business of any certificates.
partners) have the experience, ability and
commitment to make your idea a success. Please follow the steps outlined in the
It should also give details of your education illustration below.
and qualifications, work experience, training
and hobbies. Practical experience is
especially important.
2.4 Training
Describe any training courses you have been on which will help you to run your
business. These might be business skills courses or courses to develop industry
skills, for example, in carpentry or hairdressing. Give details of any training you
plan to do in the future.
05
Section three
This section is to describe what your People reading your business plan may Please follow the steps outlined in the
business is going to sell. Businesses not be familiar with your product/service illustration below.
can sell two things – products or services. so you need to explain everything,
Products are objects, for example, even things that seem obvious to you.
clothes, jewellery, books, etc. Services Get people who are not involved in the
involve selling time to do something for business to read your description to make
a customer, for example, a plumber, car sure they can understand.
mechanic, etc.
3.1. What are you going to sell? 3.2 Describe the basic product/
Is your business going to sell service you are going to sell.
a product, a service or both? If your product is hard to explain
it’s a good idea to include a picture.
3.1 3.2
3.3 Describe the different 3.4 If you are not going to sell
types of product/service you all your products/services at
are going to be selling. the start of your business,
For example, if you were selling explain why not and when
t-shirts, you might stock certain you will start selling them.
colours and sizes. If you were You may start your business after
going to be a plumber you having done market research
might have two services, one on a sample of products/
for commercial properties and services. You may want to wait
one for domestic. until you have a regular income
before expanding the range of
products/services you offer.
3.3 3.4
06
Section four
The market
Purpose of this section How to complete this section
This section is to describe the customers The best proof that customers will Please follow the steps outlined in the
that might buy your product/service. be interested in your business is if you illustration below.
You need to understand these customers have already sold some of your products/
so you can work out how to tell them services. The next best thing is to have
about your business. customers waiting to buy from you.
4.5 Describe
factors that
help your
customers
choose which
business to
4.2 Describe buy from
your typical
customer For example,
which business
For example, has the most
if they are experience,
individuals, how 4.6 Explain
which business
old they are and whether you
4.3 Describe is nearest to them
how much money have sold any
where your or which product
they earn. If they products/
typical they think is
are businesses, services
customers in fashion. 4.7 Explain
what sector they already.
are based how many
are in and what
4.1 Explain 4.4 Explain Describe how customers
size of business For example, are
whether your what prompts many sales and you have
they are. they in the UK, in
customers your customers how much money waiting to
are businesses a particular region to buy your you made. If you buy from you
or individuals or worldwide. product/service can, provide a
list of customer/ Ask potential
Your customers For example, sales details. customers to
might be both when they have write a ‘letter
individuals and a leaky tap or of intent’, stating
businesses. when they that they would
receive a big like to buy your
salary bonus. product/service
and include
copies in your
business plan.
07
Section five
You need to contact potential customers Different marketing methods are outlined
to tell them about your business. Marketing below. Decide which methods are best for
describes any activity that attempts to your business; choose about three and list
make contact with potential customers. the required detail for each.
If your marketing is successful, your
potential customers will learn what your Important
business does and where to find you. You must include all costs in your cashflow
Popular marketing methods are outlined forecast in section 10.3.
below.
> Word of mouth > Business literature – leaflets and > Tradeshows and exhibitions
When customers hear about your business business cards Some businesses can access large
through others, that’s word of mouth These should detail only the most audiences at a tradeshow or exhibition.
marketing. If customers like your business important information about your business. However, exhibiting is expensive and time
they will often recommend it all on their You should keep the design and wording consuming, so you need to be sure it will
own. However, it is worth considering how simple. If you have already produced be worth the effort. If you plan to attend
you could encourage them to tell people, some, you should attach them to your events, you should explain:
for example by offering an incentive, like business plan; otherwise you should
a discount. describe the design or include a sketch. – which events you are planning to attend,
You should also explain: when and how much it will cost
> Advertising
There are many ways to advertise your – what materials you will produce, what – why it is important to attend these events
business, for example, in a local paper, information will be on them and who will at this stage in your business
on the internet or in a directory like the design them
Yellow Pages. You should explain: > Website
– how many you will produce, who will print Websites don’t have to be complicated -
– which methods you have chosen, them and how much it will cost just three or four pages to show what
why and how much it will cost you do and how to contact you. If you
– if you are going to distribute materials already have a website you should give
– the type of advert you will use, for to customers, explain how and where the address. If you don’t have one but
example, size, colours, etc. plan to, you should explain:
> Direct marketing
– how many adverts you will use and how Direct marketing involves contacting – the design and any special functionality
long each will run for potential customers to directly sell your you want to include, for example, an
product/service to them. It can be done online shop.
on the phone, in a letter or email or face-
to-face. You should explain: – who is going to design it for you and how
much it will cost to build and maintain
– which method of contact you will use, why
and how much it will cost You can refer to The Prince’s Trust
in your marketing materials using the
– how you will find names and contact words ‘supported by The Prince’s Trust
details of potential customers Business Programme’. You cannot use
The Prince’s Trust logo.
08
“ Before setting up my company I was
struggling to find a purpose in life, now I not
only have a thriving business but I’m giving
something back to society.”
Gina Moffat
“ The Business
Programme helped
me to gain the skills
and the finance I
needed to start up
my business.”
Sam Ho
09
Section six
In section four, you described your There is no right amount of research. It is There are two types of market research
potential customers. Most of these better to research your local market, in the outlined in the illustration below: >
customers will already be using other area you are going to run your business,
businesses. This section is to research than it is to research the entire global > Desk research
those businesses and customers. market. The right amount of research will > Field research
tell you what your market looks like, how
Lots of businesses look good on paper it behaves and what customers expect. Write up your findings including the most
but the only test that matters is whether important information only.
the product/service sells. You can’t be sure
that your assumptions about your business
are right unless you do some proper
research (i.e. don’t just ask your friends
and family if they think it’s a good idea).
6.1 Desk research uses information > any important facts, statistics or events
from the internet and books. > whether the market is seasonal or
It involves learning what other people dependent on other external factors
say about your market and finding out basic (for example, the weather)
facts. When writing a description
of your market, you should explain: Good places to find information are:
> how big the market is (for example, > general area statistics:
how many sales take place in a year?) – upmystreet.com
> trends in your market (for example, are – businesslink.gov.uk
sales going up or down? Are people > government agencies:
changing how they buy the product/service?) – statistics.gov.uk
> libraries: sector magazines and directories,
Yellow Pages, etc.
> your own knowledge from previous jobs
or experience working in the field
6.3 Test trading lets you practise > where you did it and how much it cost
running your business. > how many products you tried to sell and
The aim is to see if customers will buy your at what price
product and at what price. It doesn’t have > how many products you did sell and at
to cost lots to do. If you complete test what price
trading, you should explain: > the key things you learnt
10
Section seven
A competitor is any business that offers A SWOT analysis will help you to Please follow the steps outlined in the
a product/service that is similar to yours. understand all the things, good and illustration below.
Businesses often have many competitors. bad, that could affect your business.
It’s best to focus on those which customers If you know what these are, you can work
are most likely to buy from instead of you; out how to resolve them or use them
probably those nearest to you, with the to your advantage. Thinking about your
most similar prices or the most similar weaknesses and what could go wrong
products/services. is important because it will allow you to
correct your mistakes before they happen.
You need to think hard about your business
and how you compare to your competitors.
You should put your thoughts in a SWOT
analysis. SWOT stands for Strengths,
Weaknesses, Opportunities and Threats.
7.1 Table of competitors 7.2 SWOT analysis 7.3 Unique Selling Point (USP)
Find out information about your Each part of a SWOT analysis is explained Your USP is the thing that makes your
competitors. Try to do this for at least five below. Try to think of three points for each business different from your competitors.
competitiors. category. Make sure each point is specific It might be specific to your product/
to your business. service or it might relate to the way you
You need to work out: run your business. It would be the reason
> who they are Strengths that customers stopped using a different
> where they are > Positive things about your business that business and became your customer. Be
> what they sell will make it stand out against competitors. specific and avoid clichés such as, better
> how much it costs These might be specific to your product/ quality products, better customer service
> how big the company is service or more general, such as your or cheaper products.
> what their main strengths location.
and weaknesses are If you can’t think of a USP you need to
Weaknesses review and improve your business idea
> All the things that could mean you struggle so that there is something that makes
to make your business work. For example, you different from your competitors.
areas that might be affected by your lack
of experience or by lack of money.
> For each weakness, explain what you are
going to do to address it, for example,
more training.
Opportunities
> External factors that you and your
competitors can take advantage of, for
example, changes in the law or market
trends.
Threats
> External factors that could affect how
well your business and your competitors
do. For example, a large shopping mall
opening up that might take away your
customers.
> Explain how you will prepare for these
and how you will reduce their effect
on your business.
11
Section eight
It’s important to work out how your Different stages to think about are outlined
business will work on a day-to-day basis. in the illustration below.
It’s easy to forget little things and it’s
surprising how many people forget big Important
things, like working out when and how to You must include all costs in your cashflow
get paid. Imagine you are preparing for forecast in section 10.3.
your first sale; work through the different
stages, from making or buying your
product through to delivering it and taking
the money.
8.1 Delivery
to customers 8.2 Payment
How long will it take to When will you get paid 8.3 Suppliers
8.0 Production deliver your product to your and how, for example, Explain who you have
If you are making your customers and how will it be with credit cards, cheques or chosen, what they will
product, how long will it delivered? Is the cost of cash? Will your customers pay supply and when you will
take? If you are buying it, how delivery included in the cost you upfront or pay a deposit pay them, for example, upfront
long will delivery take? Is there of the product or will you and the rest when you finish? or within 30 days. Include at
a minimum order? Do you have charge customers extra? Who will do your books least two quotes and a
to pay upfront? How much and how often? back-up option in case
stock do you really need they let you down.
to order? 8.4 Premises
Where will you run your
8.5 Equipment business from? Describe the
What equipment do space and explain why it is suitable.
you need, for example, a Working from home may be easiest
8.6 Transport computer, a mobile phone, a and cheapest but will it work and do you
How will you get sewing machine? What will you have permission from the owner or the local
about, for example, to use each item for, how much will authority? If you plan to rent premises, think
pick up stock or to meet it cost and where will you buy it about the cost, the type of contract, the
customers? How much will it from or do you own it already? facilities (for example, telephone and
cost? Do you need a driving internet) and whether it is convenient for
licence? If you do and you your customers. If you are selling on a
don’t have one, what market, when will you trade? How
will you do? do you rent a stall? Is there
8.7 Legal a waiting list?
8.8 Insurance
requirements Insurance protects your
What laws apply to business against risks. There
your business, for example, are many types, for example, public
registering with the Council if you liability (in case someone sues because
deal with food or with HMRC for they suffer a loss they think is your fault),
VAT if your turnover is over the contents (to protect stock and equipment),
limit? Do you need a trading and goods in transit (to protect goods being 8.9 Management
licence? Where would you go moved in vehicles). Make sure you research and staff
to get legal advice? which types of insurance you need and Will you run the business
include at least two quotes for each. on your own? If people will
Try looking on simplybusiness.co.uk be helping you, what will
or moneysupermarket.com/ they do?
business-insurance.
12
Section nine
Before you decide how much to sell your To work out your costs, use the table
products/services for, you need to work provided. Each of the rows is explained
out how much each one costs you to below.
make and deliver. This will stop you selling
things for less than they cost. * If you are completing this form in MS Excel,
these sections will calculate automatically.
The price you charge customers for
a product/service must be higher than
its cost and include enough money to
cover the extra costs of running your
business, for example, petrol or rent/bills.
It must also include the cost of your time.
The difference between an item’s cost
and its price is your profit margin.
A. B. C. D.
If you can’t work out the price Break down your product/ Work out the total cost of the Decide how much one hour
of a single product/service, service into parts (for example, different parts of your product/ of your time is worth when
you can work out the price of different materials, packaging, service (add up all costs in B).* you are making or delivering
a batch. For example, for food labels, etc.) and put each one your product/service. As a
this might be on portions of four in a separate box. Work out the guide the national minimum
or for t-shirts, a batch of 10. cost of each and write it down wage is about £6 per hour.
in the relevant box.
E. F. G. H.
Work out how many hours Work out the total cost of Work out the total cost of your If you worked out the cost of
it will take to deliver and make your time (cost D multiplied product/service - cost of parts a batch, i.e. for more than one
your product/service. by cost E).* (cost C) plus the cost of your product/service, to work out
time (cost F).* the cost of an individual unit,
divide the total cost (cost G)
by the number of products/
services in your batch
(cost A.)*
13
Section ten
14
Section ten
>
A. List all the different things you spend B.Add up all the different costs in part A Back up plan
money on each month. Some of these to work out your total monthly costs.* Everybody needs a plan B. Even if the
will have predictable costs, for example, chances of your business not working
rent, and others will vary, for example, C.List income you receive every month; are small. In this section describe what
entertainment costs. For the items that including income from benefits such you would do if your business didn’t work
vary, you should work out how much as Child Benefit, New Deal or Working or if it didn’t do as well as you hoped.
on average you spend a month. Do not Tax Credits.
include your business costs. For example, how would you keep your
D.Add up all the different amounts in part C business going for as long as possible?
Things you might want to include are: to work out your total monthly income.* Would you get a part-time job? If so,
> Mortgage what would it be doing?
> Rent E. To work out the income you require from
> Council tax your business, take away your total costs And if your business really didn’t work,
> Gas and electricity (B) from your total income (D).* what would you do then? Would you
> Water rates go back to college or try and get a job?
> Personal and property insurances
> Food
> Clothing
> Telephone
> Hire charges (TV, video, etc.)
> Entertainment (meals/drinks, cinema, etc.)
> Subscriptions (gym, magazines, etc.)
> Car tax and insurance
> Car service and maintenance
> Children’s expenditure and presents
> Savings plan
> Credit card and personal loan repayments
15
Section ten
>
A.The columns show the months in your first > Insurance and tax Breakeven
year of trading. Write in the names of the > Motor repairs/maintenance Your breakeven point is the number of
months. They should be the same as in > Petrol/diesel/other travel costs sales you need to make to cover the costs
your sales/costs forecast in section 10.1.* > IT costs of running your business. To calculate
> Loan repayments your breakeven:
B.The top rows show money coming into
your business and when. You should list You should explain what each cost relates G.Work out the annual cost of running your
each type of income on a different line. to in your costs table in section 10.4 of business (The total column in row E of
Typical types of income you should your business plan. your cashflow)
include are:
> income from sales (should be the same E. For each month add up the total amount H.Divide cost G by your gross profit margin
as in your sales/costs forecast in section of money you have going out of your percentage (row K in your product/service
10.1).* business.* costs and prices table)
> income from a part-time job
> loan funding F. The bottom rows show how much money J. To work out how many sales you need to
> any of your own money that you are is in your business at the beginning and make in a week, divide H by the number
putting into the business end of each month. of weeks in a year you expect to work.
C.For each month add up the total amount a) Balance – take the money earned in that K.To work out how many sales you need
of money you have coming into your month (C) and subtract the money spent to make in a day, divide J by the number
business.* (E).* of days in a week you expect to work.
D.The middle rows show money going b) Opening balance – should be the same as
out of your business. List each cost on the closing balance of the previous month.*
a different line. Include all the costs you
have worked out in earlier sections of your c) Closing balance – the month’s opening
business plan, for example, marketing balance (b) plus the current month’s
costs, equipment costs, personal survival balance (a).*
budget. Other costs to include are:
> Tools
> Materials/stock
> Rent/rates
> Heat/light/water
> Phone
> Postage
> Printing and stationery
16
Section eleven
ten
>
Telephone
0800 842 842
Fax
020 7543 1200
Email
info@princes-trust.org.uk
princes-trust.org.uk
Or call 0800 842 842.
DSN0710 ©The Prince’s Trust 2009 - all rights reserved. The Prince’s Trust is a registered charity, number 1079675,
incorporated by Royal Charter. The Prince’s Trust Trading Ltd, a company registered in England no. 3161821.