by Emilie Wiseman

Created on: January 27, 2007   Last Updated: April 13, 2007

Planning for your new business
Part One - From concept to plan

You may have the germ of any idea or concept and are eager to turn this into a new business venture. Before you launch yourself into the marketplace, however, take a step back and think about what it is you really want to achieve. This is the first step of coming up with a business plan.

There is a well known saying that goes: You will plan to fail, if you fail to plan.

A good business plan is a live document that will help you overcome all the obstacles in your path as you venture forth. A good plan will increase your confidence as the research you carry out, as a necessary part of the planning process, will highlight many of the pitfalls you are bound to encounter if you don't plan. Identifying the obstacles and barriers and understanding them will help you to overcome them and reduce the risk of failure.

So, what does a good plan consist of? Contrary to popular belief, creating a business plan is not rocket science. It is following a few simple steps, undertaking lots of research (basically knowing your market), and adding a huge dollop of common sense and practicality.

Potential funders will also want to see a good business plan. It will reassure them that their investment is in safe hands, and that you have really taken the time to get to know your market, and tested the viability of your business idea.

Creating a business plan is like building a house. You start with the foundations and complete the structure, brick by brick, room by room, and finally you complete it put the roof on, and move in.

The foundation of your business plan is the financial viability of your business if you are setting out to make profit (non-profit organisations follow the same steps, but it is a different approach). Where will you get your revenues from? How much of a profit margin can you make? How will your cashflow perform over the course of a year (especially important for seasonal businesses)? How much capital do you need to start your business? Where will you get this capital from? And so on....

Closely tied in with the financial forecasts is your Marketing Plan. This will drive your sales forecasting, your pricing policy, profit margins, etc. The Marketing Plan, however, is not just about sales. You will need to understand your market inside and out. Who are your customers? Where will you find them? Who are your competitors? What makes them successful or otherwise? Is there an ongoing market for your business?

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