Do I Need A Business Plan?

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How to write a business plan.

Writing a business plan may seem like a daunting experience if you’re starting your first online business. However, a basic business plan is an essential part of your journey; it will help keep you on the right path and give you a direction to travel in. 

If you’re looking for investment or a bank loan to start your new empire then you’ll need a full-blown business plan including revenue forecasts and a P&L.  (Get in touch if you need help with your Business Plan.)  

But if you’re looking to sell cupcakes online or starting up your own craft site, then writing a business plan may feel like overkill and could stop you in your tracks. 

A one-page business plan enables you to focus your efforts, remember what you’re trying to do and why you’re trying to do it and is a simple reminder to keep you on track and monitor your success. 

Here’s how to write a business plan and what you should include in it: 

What’s your business idea? 

What is it you’re wanting to sell? Is it a product or service or your expert advice? Serial entrepreneurs and business owners often ask “what problem are you trying to solve?” 

That’s easy if you’re selling prom dresses - “I’m providing bespoke, fitted dresses for young ladies to wear to their school prom (so they don’t all arrive wearing the same TopShop dress)”. But, back to selling cupcakes, although I agree there’s no problem that can’t be solved with a cupcake, “because I like making cupcakes” isn’t solving a problem. So why would someone want to buy them? Because they’re gluten-free?  Or vegan?  Or because no one in your neighbourhood delivers cupcakes to your door? 

Who’s your customer? 

Who are you selling your product or service to? This is crucial to know 1. where to find those people, how to reach them, where to advertise and 2. what is it they want, how should it be designed and what messages show you use to attract them? 

Knowing this helps you decide whether emoji-marketing messages on TicToc, Facebook organic or paid ads or a targeted Google keyword campaign, for example,  is the right way to go. 

Who else is doing this? 

Who is your competition? What do they sell? Where & how do they sell it? Where do they advertise? What messages and keywords do they use in their marketing? And that leads to the next section…

Why is your product different? 

Why should people buy from you? What’s your USP? It could be that you offer the same product as your competitors but yours is delivered quicker, tastes better, contains better ingredients, fits better, or even is cheaper (although be careful basing your competitive advantage on price as anyone could come along and undercut you). Are you a more ethical provider or does your audience have something unique about them that you are aiming to target? 

A ‘back of a beer mat’ budget.

Although I’d always advocate a more advanced budget if your business is going to be your main focus and revenue generator, it sometimes feels too hard to complete and can stand in the way of getting your business launched. However, its important to know how much its going to cost you to run your business and therefore how much money you need to make not to run at a loss. How many customers and how many products do you need to sell and how often?

Example business costs to include: 

• How much will your website cost to set up?

• What are the on-going costs, e.g. Hosting fees / platform costs / equipment & maintenance? 

• What credit card and transaction fees do you have to pay on each sale? 

• Do you need a salary? 

• Do you need premises or equipment? 

• What does your product cost to make? Or your service cost to provide? Do you need to travel to clients? Have you thought about petrol costs? Overnight stays? 

• Do you need staff? 

• Will you need to advertise? 

When you have added this up you should have some idea of how much you need to charge for your products or services. And how many of them you need to sell to not just cover your costs but make a profit. Most businesses don’t make a profit straight away, there are usually set up costs than need to be recouped so don’t give up if the numbers are a surprise to you - that’s what the business plan is for! 

What does success look like? 

How will you know you’re on the right track? What metrics are you going to monitor? Revenue is the result of a good business, not what makes it so. 

If you’re starting a blog and your revenue is coming from selling advertising, then ‘the number of visitors to your blog’ is a key metric to track. Are you getting new visitors? Are your visitors coming back often? What positive feedback / engagement are you getting?

If you’re selling a product, then sales are important - but do you also need to monitor repeat customers? Not as important for prom dresses as it is for cupcakes - if people are only ever buying your cakes once, why aren’t they coming back for more? 

Are you selling a service? Positive customer reviews, word of mouth referrals or repeat customers will all determine your long-term success. 

If all this feels too structured, why not have a brainstorm? Get a pad of post-its, write down the ideas in your head and group them into the above ‘buckets’. Having all those prompts in front of you when you start to get this down on paper will really help. 

So, don’t let the words ‘Business Plan’ scare you. Having a good think about what it is you’re setting out to do, why you want to do it and what your end goal is and getting that down on paper is a really good way to get clarity and focus. And when you’re up and running and don’t know what to do next, you can refer back to this document to remind you where you’re heading. 

Good luck!

I’ve set up and run a number of websites for some of the UK’s favourite brands, each with a Profit & Loss & forecasted budget, a business plan and an overall strategic vision. Without this forward planning, none of the businesses would have been a success.

If you’ve got an idea and don’t know how to move it forward, I can help.