Thursday, 8 November 2007

Free Business Planning Tools

If you have decided to take your project to the next level and make it a formal business venture, a business plan would come handy. The offering of business plans and various templates on internet is huge. Most of them are offered on a commercial basis, i.e. for a fee. Is there a way around to get a free business plan? Well, yes, sort of. A few ideas are listed below:

1. Free resources

There are plenty of free resources, such as BBC´s How to write a business plan?

The Government of Australia, actually, put together a very easy introduction to writing a business plan and preparing a marketing study. How do I write a business plan?

Don´t miss a practical guide from the UK´s Business Link: Use your business plan to get funding. The site also provides ready excel spreadsheets for cash-flow planning. Great!

2. What the business plan is for?

Before you start spending your valuable time on writing a business plan, reflect about the ultimate objective of the business plan. What is it for? To raise funding? To help you plan your resources? To structure your ideas? etc. This is important, as many business plan templates assume that the business plan will be used to raise funding. Although this might be the case, very often a business plan can also serve as a strategic and planning instrument. Make the best use of the money and time that you are ready to invest in writing your business plan!

Tuesday, 6 November 2007

Writing a Business Plan from Scratch

Writing a business plan does not have to be difficult and you don´t have to buy any software/templates to do the job. Follow the following simple steps and complete your business plan without expensive help:

1. Executive Summary
Write a summary of your idea. This should include a brief description of your proposal explaining its commercial viability, expected returns, market opportunities and threats. Everything should fit on one page. This is your selling pitch. Learn it by heart!

2. Market Analysis
This section should explain the market opportunity, i.e. the total size of the market, trends and the target segment. A market research, even if conducted only with the help of search engines, would strengthen the conclusions of your analysis. Don´t focus only on opportunities. Identify market threats, such as competition and the change in technology, and explain how you will counter them.

3. Operational Plan
Provide a reasonably detailed operational plan. This section should focus on human resources, technical and other assets required. If available, add CVs of your managers and staff. Explain where your business will be located.

4. Financials
First, provide projections for estimated sales, if possible segregated across different product/service lines.

Second, prepare a budget with separate budget lines for staff salaries, equipment, telecommunications, equipment, rent and other expenses.

Third, if any external debt financing or leasing is planned, include this as a separate line to take into account interest/leasing payment costs.

Once you have the three lines you can proceed with the construction of the financial statements, namely, the Balance Sheet, Profit & Loss (Income) and Cash Flow Statements. Calculate Return on Assets (ROA) and Return on Equity (ROE) - these terms will be explained in later blogs. Provide an estimate of your break-even point, i.e. the date when the business will start covering its costs.

5. Legal Part
Explain how the business will be incorporated, the taxation implications, and governance. This section should also discuss potential exit mechanisms for investors.

This short blog provided an overview of some of business planning concepts that will be explored in further blogs. For more ideas visit - a free guide to starting and growing your business.