Writing a business plan is a feared part of launching a new business, and it is natural for entrepreneurs to have some uneasiness about getting started on the document. This is because the  ability of the business to raise money is based to a great extent on the strength of the business plan and mistakes can cost entrepreneurs many deals.

Here are some tips to overcome writer’s block and dig in to the business plan:

Outline and Write Bullets

To start to get a basic idea of the work to be done, begin with a business plan template and, in one sitting, write out everything you can within each section of the plan. Write your notes in bullet points or phrases rather than full sentences at this point, with an aim to dump all of your thinking and knowledge to date into the template.

Review From The Beginning Onward

Next, review your notes beginning with the company overview (the executive summary is always best left until last). Highlight areas where you will need to answer strategic questions or uncover data through research. After this process is completed, you should be able to develop a sense of how much work will have to go into each section.

Tackle the Plan Piece by Piece

To take this large project and make it seem much more manageable, work on a section at a time, devoting a few hours at a time to pull together additional information and make decisions (for example, you may want to consult a lawyer to decide on a legal structure for the company). By scheduling out a few hours a day (or a few times a day if you are not working) you should be able to move through the plan rather quickly. Working in the order of the plan will be helpful, as each section builds on what comes before.

Tweet This Post

In this continuing series of articles on how to write a business plan or Information Memorandum to raise capital, Part 7 discusses the business plan content specifically ‘Basis of Operation’.

Basis of Operation

This section of the business plan describes the facilities, location, space requirements, equipment and labour necessary to produce the company’s product or service. Again, the reader is not likely to be an expert in your field of activity, so it should be written with the layman in mind. Highlight features of the operation which yield an advantage over competitors.

Clearly, operational requirements vary from business to business. Although some of the following points may not be relevant to your venture they will provide a general guide:-

1. Location

Describe the present or planned location of the business, explaining the rationale for choosing that site and outlining both positive and negative features relating to:-

* Labour availability

* Level of wage rates

* Proximity of customers and suppliers

* Ease of distribution

* Availability of grants (should be of secondary importance and viewed as a bonus!)

2. Facilities

Details of current facilities and future requirements should be provided e.g. plant and office space, machinery, specialist tooling and other equipment. Future needs should be ascertained on the basis of the expansion of capacities necessary to meet the sales growth projected. Lease/buy options should be considered for both equipment and space and details of future capital expenditure should be given.

3. Manufacturing Plans

The manufacturing process involved in producing the company’s products should be explained, together with the policy with regard to sub-contracting, i.e. make or buy decisions. It may be useful to present a production plan showing cost-volume details at various turnover levels, breaking down costs between raw materials, direct labour, factory overheads and purchased components. Stockholding at various turnover levels needs outlining as does stock control, production control and quality control. The latter is particularly important to minimize service problems and customer dissatisfaction. Purchasing should be explained, indicating purchase control procedures, to ensure efficient buying. In all cases detailed analyses should be

relegated to an appendix.

4. Labour Force

Discuss whether the local labour force has the necessary skills in sufficient quantity and quality (high productivity, low absenteeism) to manufacture the product or supply the service of the company. If skills are inadequate outline the training that will be given and the cost.

The content of Business Plans will be further covered in subsequent articles by Len McDowall.

© Len McDowall, Integral Capital Group 23rd October, 2007

www.integralcapital.com.au

Tweet This Post