Guide to Writing a Business Plan by Alan Gleeson

8/14/2019 Guide to Writing a Business Plan by Alan Gleeson

1/27

The Definitive Guide to Writing a Business Plan by Alan Gleeson

1. What is a Business Plan?2. Why do I Need one?3. How do I Write a Business Plan?4. Mistakes to Avoid5. How do I Pitch a Plan?6. The Marketing Plan7. A to Z Guide of U.K. Start-up Resources8. Key Business Plan Resources9. Business Plan Pro 11.010.About the Author


2/27

What is a Business Plan?

A business plan is not just a document. It is a holistic analysis of your company, the

environment it operates in, and a route map to achieving success based on the resources

available. Unfortunately, the image most of us have is of a 30-page bound document.

While the business-planning process is in itself a very worthwhile pursuit, most business plans

are produced for a specific purpose. The plan is used as a means to convey an idea with a view

to achieving a specific goal, e.g. securing funding. Hence, the plan needs to be tailored withthe audience in mind, and a good knowledge of their requirements will help shape a winning

plan. For example, the requirements a Venture Capitalist will have when assessing a planseeking to secure a million-pound investment will differ considerably from those of a local

bank manager who needs to see a plan presented in support of a small-loan application. Whilethe former will be primarily looking for capital growth, the latter will be more concerned with

security.

Why do I Need one?

The following list represents some of the key benefits of planning:

1. To plan for an uncertain future

Business planning is vital to help you manage your business more effectively. By committing

your thoughts to a plan, you can understand your business better and also chart specific

courses of action that need to be taken to improve your business. A plan can also detailalternative future scenarios, set specific objectives and goals, and list the resources required

to achieve these goals. In short, it can help ensure that you are prepared for all sorts of

eventualities.

2. To help grow your business

In an ideal world, all businesses would be self-financing in exploiting business opportunities. In

reality, few are afforded this luxury, and hence, will be required to secure external

investment. The production of a credible business plan is one of the primary requirements for

any entrepreneur seeking investment to grow.

3. To commit to a particular course of action

A business plan can help a company assess future opportunities, choose one, and then commit

to a particular course of action. By committing to one opportunity, all other options are

effectively marginalised and the company is aligned to focus on key deliverables.


3/27

4. To manage cash flow

Careful management of cash flow is a fundamental requirement for all businesses. The reasonis quite simplemany businesses fail, not because they are unprofitable, but because they

ultimately become insolvent (i.e., are unable to pay their debts as they fall due).

5. To ensure all bases are covered

When you start a new business, the temptation is to spend time on the idea and then react to

events as they come up rather than focusing on what is important. The very creation of abusiness plan ensures that you cover all the various bases when taking an idea from conception

through to launch.

As youll have garnered from the above, business planning is an essential activity, regardless

of the stage of business youre at. The very process of producing a business plan enables

management to give due consideration to the various factors creating the opportunity theyare seeking to explore. The resources required and the key drivers needed for success are

identified as well.


4/27

How to Write a Business Plan

Having decided to produce a business plan, there are three main ways to write one:

1. Pay someone to write it.

2. Write it yourself using general software such as Microsoft Word and Excel.

3. Write it using a task-specific software product such as Business Plan Pro 11.0.

If you, like many entrepreneurs, are time rich and cash poor, option 1 quickly removes itself

from the equation, given the cost of having someone write a plan for you.

You are then faced with the choice between using Business Plan Pro or building everything

yourself, from scratch, in Microsoft Word and Excel. Why are we not recommending other

business plan software options? Because Business Plan Pro is the best business-planningsoftware available without exception. Palo Alto Software (the maker of Business Plan Pro)

has a proud history, has had category leadership for years and has extensive lists of

testimonials and independent reviews on the company website, all corroborating this view. By

all means, consider other software options; however, we are confident that your own analysis

will reveal that Business Plan Pro stands head and shoulders above the alternatives.

When it comes to using Word and Excel there are undoubted benefits not least the fact

that they are free in the sense that they are bundled on most PCs. The interface is also

familiar, given the popularity of their use. However, while these tools are excellent when you

know exactly what you need to produce, they offer negligible assistance when it comes toproducing specific content, such as that required for a business plan. If the purpose of the

business plan were simply to jot down a few notes to keep you on track, they would suffice.

However, if you intend to circulate the plan to peers, colleagues or prospective investors, you

will need to produce a plan worthy of your name. After all, you are the author!


5/27

Mistakes to Avoid

The following constitutes a list of the most common business planning mistakes and how toavoid them.

1. Incredible financial projections

One of the key areas business plan readers will focus on will be 'the numbers'. Specifically,

they will concentrate on the projected Income Statement, also known as Profit & Loss. The

fact that numbers are projected does not mean that those figures can be included withoutdue rigor or process. They need to be credible, defensible and consistent. Of course

forecasting is not an exact science, and the use of proxies can help the author ensure thatthe figures included are plausible and consistent with the story being told in the other areas

of the business plan. The figures must also show an ability of the company to generate freecash flows so that the business can be run profitably while satisfactorily servicing their debts

at the same time.

All costs should be recorded, including salaries to owner managers who run the company. It isnot credible to generate P&L projections where expenses such as salaries are omitted to

demonstrate managerial commitment or to artificially reduce losses, etc. By the same token,no investor will be prepared to fund a business where the projected salary payments are

excessive. While dealing with finances is not everyone's strong point, there has to be someoneon the management team who is cognizant with the maths. A business plan will need to include

everything from break-even projections to proposed return on investments to cash flowforecasts, and one of the key players will have to converse on these subjects in a convincing

manner. They will also need to justify the numbers.

2. Lack of a viable opportunity

A business plan needs to not only describe an opportunity, it must also detail how the

opportunity can be exploited profitably and demonstrate the companys ability to deliver whatis required. In recent years there has been a significant increase in plans that are

inaccessible to the average reader because they are couched in technical jargon andunfamiliar terms. If the reader of the plan cannot fully grasp who the prospective customer

is, how that customer will be targeted, and the prospective benefits from the proposed

solution, the reader will not invest. In an increasingly time-pressed world, people cravesimplicity. Many business plan recipients will only scrutinize the executive summary and the

financials, using these as the decision points as to whether to read further or not.

Hence, it is of paramount importance that both the executive summary and the wider plan

describe the opportunity in readily understood terms, such as:

o What is the issue or pain point?o What is the proposed solution?


6/27

o What are the benefits of the solution?o Why are these benefits compelling?o Who will benefit the most from these?

Once these are detailed, there will be greater transparency regarding the viability, or

otherwise, of the proposed opportunity in terms of the company's ability to profitably servethe target market.

3. No clear route to market

All opportunities are only prospective ones without evidence that the target market can be

accessed profitably. Many entrepreneurs are inherently product focused, concentrating theirenergies on 'the idea' to the exclusion of many other important elements such as how they

intend to access their customer base. The growth in popularity of the Internet has certainlyhelped niche producers find geographically dispersed customers, making many more ideas

commercially viable. However, it does not come without its challenges, as creating awarenessonline is both costly and intensely competitive.

The business plan must include a comprehensive and credible analysis of how the company

intends to secure access to their target market in a cost-effective manner. The low cost andminimal barriers to entry for websites have resulted in the creation of hundreds of thousands

of sites. Ensuring that a site stands out from the crowd is easier said than done. Knowledge ofwho the customer is and how they buy is very important, but identifying them and accessing

them on an individual basis is much more challenging and costly.

4. Overestimation of revenues

Another key element of the plan will relate to the size and value of the opportunity. Does the

business plan describe a small local business-to-business opportunity with limited scalability/return or is it a concept with widespread or even potentially global consumer appeal? While

the description of the market opportunity will undoubtedly be couched in positive terms, anobvious danger relates to the innate optimism of entrepreneurs and their tendency to

exaggerate every business opportunity. Hence, the general interpretation of sales forecastsshould be optimistic but not excessively optimistic.

Admittedly what constitutes 'excessive' is subjective, but the numbers will need to bejustified and if it emerges that the figures are mere fantasy, the author will lose all

credibility and it will significantly undermine any confidence the potential investor might have

in the plan.

It is important to guard against this by use of proxies and conservatism when it comes to

sales projections. Placing some rigor around the process of deriving credible revenue figuresalso serves the entrepreneur well by enhancing their awareness of some of the key drivers for

revenue growth in their business.


7/27

5. Lack of appreciation of the importance of good cash flow management

A critical subtlety of any new business is the ability of the entrepreneur to understand thedifferences between cash and profits and to accept the fact that insolvency is probably the

most significant threat to a business. Many businesses fail, not because they are unprofitable,

but because they ultimately become insolvent (i.e., are unable to pay their debts as they falldue).

Good cash flow management is vital when businesses pursue investment opportunities wherethere are significant cash flows out, in advance of the cash flows coming in. The start-up

phase of a business is an obvious time when cash flow is under stress with uncertain incomestreams sitting alongside a raft of certain and often overdue bills. This tension is

exacerbated if there are delays to the income streams, e.g. if a restaurant fails to open ontime.

Once up and running, a company can bank the income immediately if they are a 'cash-only'business; however, if they sell on credit, they receive the cash in the future and hence may

need to pay some of their own expenses before that income hits their account. This will put a

further strain on the company's solvency. A well structured business plan needs to reflect

reality with likely losses in the first months of trading being expected and with financing

provisions, e.g. overdraft limits, being put in place in advance of the predictable cash squeeze.

A contingency figure should also be added as it is important to leave breathing space for the

unexpected costs and overspends that always occur when least expected.

6. No clear objective

What is the main purpose of the plan? If it is to seek investment in the business, it is

important to clearly describe the investment opportunity. As mentioned previously there is a

tendency amongst entrepreneurs to focus myopically on 'the product' or 'the idea'. This is

where they expend most energy, but alas, that is only one part of the process. While the plan

describes the concept in detail, it must also address the purpose of the plan. If it is to secure

investment, one needs to recognize that investing is the investor's area of expertise and they

will be seeking an appropriate risk/ return for their investment. Their primary interest will

quickly shift from the product once they 'get it' and 'like it' to assessing the ability of the

company (including management) to generate free cash flows to enable the business to grow

while also returning cash to them.

Once the primary objective of the plan is clear, the author will be able to ensure that the key

requirements of the reader are met.


8/27

7. No evidence of real demand

Another main area of interest when planning (linked to Point 4) is justifying the sales forecastor demand levels for the product or service. There are two main elements to forecasting the

use of facts and the use of subjective assessment/ judgment. However, no matter how unique

a concept is, if the market is defined widely enough, it is likely that figures from alternativeofferings (facts) can be used to help assess likely demand levels (judgment). The aim of sales

forecasting is to come up with some revenue figures that can be considered to be credible in

the wider context. While earlier we cautioned against excessively optimistic estimates, here

we are delving deeper to ensure there is, in fact, real demand for the offering. Prospective

investors will not want to invest at the very start where the risk is highest. Is there poof of

concept in the guise of sales or firm orders? Have some sales occurred already? If not, why

not?

8. Business plan inconsistencies

A business plan needs to be consistent throughout as all the various strands are brought

together into one single entity the plan. If there are multiple authors of the plan the risks

increase that certain inconsistencies will emerge. Similarly, all presenters of the plan must be

fully cognizant of all facts and stay on script so as to ensure that a cohesive story is being

told. The numbers must also be consistent with the broader content so that there are no

contradictions between them.

9. Playing down the competition

There is always competition. Yet the number of times the phrase "there are no maincompetitorsappears in plans is considerable. No matter how unique the proposition, there willalso be some other business competing for the same scarce resource, i.e., peoples money.

While competitors may not always be obvious in product terms, competitors emerge upon

assessment of the key needs the product fulfills. By broadening the definition of the market,

substitute products emerge as ultimately all products and services serve to satiate a defined

set of needs, be they physical or emotional. If competitors can not be identified then the

search has simply not been diligent enough.

Finally, it is also important to consider the threat of entry. What will the competitive

landscape look like in a few years? Are there significant barriers to entry, or is it likely that asuccessful entry will be followed by better-placed competitors with greater resources, etc.What will emerge as the bases for competition and will the company be well placed to compete

on these bases?


9/27

10. Rushing the output

The plan needs to be right the first time and the content needs to be accurate, clear, andwith spelling and grammar correct. More often than not, business plans need to be completed

by a certain date and hence, the final stages can be rushed. Consequently, in many instances

the final output does not do justice to the plan. Attention to detail at the end is vital, so it isimportant to ensure the following:

o The plan is printed on good quality paper and bound where appropriate.o Tables and charts have been edited to ensure they are formatted correctly.o Content of the plan has been edited down to a digestible size (Addendum can be

provided on request).

o Someone removed from the process has independently proofed the plan.o If a presentation is part of the process, it should reflect the executive summary.


10/27

The Pitch

After a business plan has been written, the next stage often involves pitching the plan toprospective investors. This very fact means that the plan authors and management team

should be one and the same and that outsourcing the business plan writing process should not

be considered. It is not just the content of the business plan that is being scrutinised. Thecapabilities of the management team are also on show, and hence, their ability to deliver a

presentation in a clear, concise and convincing manner are vital to the overall objective - that

of convincing an investor to put money into the business. These prospective investors are not

investing in a physical document but in an idea and in those proposing to deliver the idea.

The following is a list of tips to maximise your chances of success when pitching to investors.

1. Know your audience

All presenters are taught the importance of knowing their audience and engaging with them ona personal level where possible. The Internet has enabled us to research more effectively

than in previous years, so it is important to use this resource to your advantage. Investorshave a range of asset classes to choose from as they decide on the composition of their

investment portfolio. Hence, it is necessary to understand the backgrounds of the prospectiveinvestors and their motivations prior to presenting. Once you have done extensive research on

the investors it is then possible to tailor the pitch accordingly.

2. Tell a story

One of the most effective ways to pitch is to place the investment opportunity in the contextof a story. Ideally, the story will focus on a problem encountered and the fact that the new

idea being pitched solves this particular problem. If the investors can relate to the problem,

they are more likely to invest in your business. After that they will be assessing how manypeople are affected by the problem and whether the proposed idea satisfactorily resolves

the problem. Finally, if they believe that the idea can solve the problem profitably and isdefensible (via patents, trade marks, etc.) it is likely they will be interested in investing.

3. Prepare to win

Pitching to an investor is not a last-minute afterthought it is the culmination of weeks, if notmonths, of planning. All too often, entrepreneurs do not plan accordingly and then find that

the preparation of their business pitch suffers. Preparation for the pitch should commence as

soon as the business plan process commences. For many investors, the executive summary of

the business plan is what opens the door for a presentation, and the full business plan mayonly be read after a successful presentation has been delivered.


11/27

4. Pay strict attention to the detail

Your typical investor will have a good eye for detail and hence, the plan and its pitch need tobe mutually reinforcing and containing no inherent contradictions. From the outset, there

should be one owner of the process who can oversee all preparations and be ultimately

responsible for the content. This is particularly important if a number of disparatecontributors have worked on the plan and where the pitch consists of numerous participants.

5. Avoid death by PowerPoint

While an average plan may be produced in Microsoft Word and Excel, PowerPoint tends to be

the tool of choice for presentations. While it undoubtedly has advantages in terms ofaesthetics, it can be misused when utilised at the pitch stage. The number of slides should be

kept to the bare minimum, the content must be rigorously analysed to ensure relevance andclarity, and time must be managed carefully.

It is recommended each investor receives a slide deck, which contains more detail than the

presentation itself (with Appendices used extensively). Finally, it is important to manage thesubsequent Q&A process carefully. This is the stage where the investor gets to request

information about details that they require as the determine if the proposal is indeed worthyof their investment.

6. Get the numbers right

Investors tend to be very focused on numbers, so all facts must be accurate. The numbers

should be realistic and defensible and at least one of those pitching the plan needs to beprepared for in-depth questions relating to the projected financials. While it is easy to couch

the opportunity in technical terms, future growth projections, supporting demographic

trends, etc., investors will focus on hard evidence. So if you have been trading, theyll want toknow turnover/sales figures, break-even points, gross and net margins (profits), and so on.

These are indisputable facts and evidence that enable them to accurately assess the risk.

If performance has been poor, the presenter will need to articulate clearly why this has been

the case and also elaborate on why investment will solve the performance gap. If, on the otherhand you have not been trading, the risk increases considerably and there is likely to be a

significant focus on supporting evidence to justify demand predictions. Remember thatinvestors have options it is a competition, so you need to sell your idea as the best option for

their investment.

7. Practise the presentation

It is clear that many entrepreneurs have not practised their pitches before impartial

observers prior to pitching. This dry run should be arranged well in advance of thepresentation date with a panel of critics who have carte blanche to critique the plan and pitch.


12/27

One attractive alternative to this is to submit an entry to the growing number of business plan

competitions. These contests afford entrants a low-cost opportunity to stress test their

plans in a very realistic role play. Such competitions test a wide range of skills that are often

neglected in the day-to-day tasks of entrepreneurs, who are focused on bringing their idea to

fruition. By producing a credible business plan and presenting your case persuasively, you will

significantly enhance your ability to secure funding.

8. Excite them

Entrepreneurs pitch to investors to sell them an idea. There must be something unique about

the idea, and it must be pitched with conviction, so as to grab the attention of investors whodeal with hundreds of business plans every month. This was summed up by former Dragons

Den investor Simon Woodroffe in a BBC2 show.

You gotta make me feel like Im going to miss out.

Why would the investor be better off investing in your business rather than leaving money in a

bank account, shares or investing in another business? If you are seeking investment it is

important to clearly describe the investment opportunity and also to sell it.

9. Learn the lessons

Do not get too downhearted if, at first, a pitch is unsuccessful. The investors are likely to

give clear reasons for their lack of interest, and this feedback must be considered carefully

as it may shape improvements in subsequent pitches. The presenter should segment the

various feedback points into groups is the issue or concern with the idea, the equity share onoffer, the management team, etc.

Most entrepreneurs need to pitch to a number of investors before securing an investment. If

you can line up a number of pitches, remember not to organise the most attractive investor up

front as there are likely to be significant improvements in the pitch after it has undergone a

number of presentations.

10. Remember the purpose of the pitch

Finally, while the emphasis may well be on an idea, it is important to remember that the pitchhas a very specific purpose. This must not get lost in all the details. If the purpose is to

secure funding, the presenter needs to ask questions after the presentation to ensure the

audience has gained sufficient information with which to make a decision. If an offer is made,

the presenter must have a full grasp on whether it meets his requirements, and options if not.

So as to maintain credibility, the presenter needs to consider all the various eventualities

before undertaking the pitch so that the pitch does not go flat at the end when the issues of

substance need to be agreed.


13/27

The Marketing Plan

A marketing plan is a core component of a business plan. It relates specifically to themarketing of a particular product or service and it describes:

o An overall marketing objectiveo A broad marketing strategyo The tactical detail related to specific marketing activitieso The various costs associated with these activitieso Those tasked with delivering these activities by name

The starting point for any marketing plan is an analysis of the strategic context, as a typicalobjective for most plans is promoting goods or services as effectively as possible. An

assessment of the company, its environment and its customers helps to ensure that the authorof the plan obtains a holistic view of the wider context. In turn this helps them to focus their

energies and resources accordingly. This is particularly important given that most marketingmanagers will be subject to that all-too-familiar constraintlimited resources (invariably

financial). In effect, a marketing plan is produced to ensure that limited resources are

allocated to activities that are likely to bring the maximum return.

An assessment of the context will include analysis of both internal and external factors.

There are a number of frameworks and tools designed to assist you with this:

o A SWOT analysis forces you to consider internal Strengths and Weaknessesalongside external Opportunities and Threats.

o Porters Five Forces is a framework designed to assist you in considering thebroader competitive and environmental context.

It is also vital that you have a thorough understanding of your customers; look to whethersegments exist within your broad customer group that can be profitably served utilizing

specific and targeted marketing activities.

Following an analysis of broader conditions, a marketing strategy can then be put in place. This

strategy needs to include financials so that all activities can be assessed in the context oftheir cost as a portion of the overall marketing budget. Regardless of the product or service,

the objectives tend to be similar for most managers; create awareness, stimulate interest inthe offering, and ultimately (profitably) convert this awareness into sales. All these factors

are intertwined and, hence, the importance of effective marketing planning.

The marketing activities of a local restaurant, for example, are going to be concentratedpredominantly within a two to three mile radius of their restaurant, as this area is where they

draw the vast majority of their customers. Tactically, there is no point in such a restaurantadvertising on TV (even locally) as the cost would be prohibitive in the context of their

business model. They are limited in terms of capacity (number of seats) and their average


14/27

cost per head so that, even if they created huge awareness and interest via TV advertising,

the resultant revenues would still be unlikely to cover the cost of the specific marketing

activity. On the other hand, stuffing leaflets through local letterboxes is extremely targeted

and comes at low relative cost, which explains the sheer volume of fast-food flyers most of us

get on a daily basis.

The reader of the plan should clearly be able to relate to the marketing initiatives in terms of

the message, the target audience and the means to accessing this audience. A good marketing

plan will detail specifics, such as the number of marketing activities, their respective costs,

and the expected return on investment.

Measuring return on marketing has historically been one of the greatest challenges the

industry has faced. The advent of PPC (pay-per-click) advertising via the Internet has finallyresulted in managers being able to track sales resulting from specific campaigns and adverts.

However, this is just one means of advertising, and calculating effective ROI (return on

investment) figures for other forms, such as billboards and TV, remains as elusive as ever.

In summary, a marketing plan should enable marketing managers to document their assessment

of the opportunity in terms of effective allocation of limited resources. While most managers

would love the luxury of a seven-figure marketing budget to spend on every conceivable

advertising medium, the reality is that most need to market effectively on a pittance. A

marketing plan assesses the most efficient means to attract potential customers and

ultimately convert them to sales. Without a plan, a business is essentially rudderless and

marketing activities are more likely to be reactive and, hence, considerably less effective.


15/27

A to Z Guide

Starting a new business is a very exciting time and also a very challenging time. Luckily thereis plenty of help at hand for those who are clever enough to look for it. Did I say clever? Yes,

I did, because many entrepreneurs charge headlong into their pet projects without giving due

consideration to the resources available to them. While the energy levels of all entrepreneurstend to be very high, it is important to step back, when appropriate, to ensure that the proper

advice is being obtained. For many people, a new business is like a boat sailing in uncharted

territory. One can reduce the inherent uncertainty and risk with good advice, appropriate

planning and a dollop of experience. The following article contains some advice and

recommendations for those starting up in the UK. While not a bootstrappers guideper se,

the assumed audience are UK-based entrepreneurs looking to set up with fewer than five

employees and limited funding at their disposal.

Where to Start?

Given that one area of particular interest for us is business planning, it seems like a very good

place to start. You must resist all temptation to skip writing a business plan. Preparing a

business plan is a vital first step on the journey of all entrepreneurs. Sure, it may seem like a

difficult proposition, especially if its the first time you have to write a business plan.

However, the business planning process will really help you get a feel for the various elements

that will determine your success, from cash flow, to sales forecasting, to your personnel

structure. You skip this critical process at your own peril.

Naturally, we recommend Business Plan Pro 11.0 (RRP 79.99) as the best means available

to write a business plan. Business Plan Pro helps you to structure your business plan, isexhaustive (meaning you cover everything) and offers help at every step. Alternative methods

include writing the plan yourself, using products such as Microsoft Word and Excel, or paying

someone to write it for you. Unfortunately, these other methods either leave you staring at a

blank screen, or simply help you avoid thinking through the conceptual and financial issues

critical to your business. Whatever method you choose, you will find more information on

writing a business plan at our business plan site, www.bplans.co.uk.

If your chosen industry is relatively new to you, Id recommend you purchase a Business

Information Factsheet or Business Opportunity Profile from Cobweb. These fact sheets will

help you understand some of the live issues within your sector. These profiles include optionssuch as How to Start a Coffee Shop to How to Start a Restaurant and cost about 5.

I cannot stress enough at this point the importance of getting advice. The great thing about

starting a business is that there are lots of experts who may be blogging about their

experiences or have written about the issues they faced and some of the hurdles they have

overcome. Here are some of my personal tips for some key areas in getting started:


16/27

Accountant

Speak to an accountant early on in the process. They can help you decide the best legalstructure for your business, explain VAT and also advise you on other financial obligations.

Aims Accountants are a group of accountants who are scattered around the UK and are ideal

for start-ups.

Accounts

You must get a grip on finances from day one dont assume it can be all outsourced to anaccountant or bookkeeper. I would recommend taking a look at products such as Intuits

QuickBooks or Sage 50 Accounts 2008. The bottom line here is that certain things, such ascash-flow management, are often neglected by entrepreneurs. If you have to pay for things up

front and only receive cash 30 days later you will have a potentially crippling financing gap. Byensuring you invoice promptly and manage accounts receivable/ debtors you will be in a better

position to ride out any credit problems.

Antivirus Software

All computer users should have an antivirus package (at the very least) in place to protect

against viruses, etc. Packages are available online and from stores such as Amazon and PCWorld. Market leaders include Norton and McAfee, but there are also good, lower-cost

alternatives available such as AVG.

Bank Account

You will also need to open a bank account. There are many different banks providing good

opening offers for start-ups, so do your research. You can also follow threads on websites

such as UK Business Forums (www.ukbusinessforums.co.uk ) or Bytestart

(www.bytestart.co.uk) to read reviews from current customers. Naturally, it is vital that the

bank is competitive and has a good online presence so you can manage your accounts online.

While you are researching bank account options, speak to them about other financial servicesproducts, such as company credit cards and merchant services (an ability to take credit card

payments). Whatever you do, keep business expenses, costs and accounts completely separatefrom your personal ones.

Business Books

Looking for some books to help get you started? We recommend the Pearson range and also

The Essential Business Guide. To avail of discounted copies please go to the resources tab on

Bplans.co.uk (www.bplans.co.uk). Business Plan Pro 11.0 includes Hurdle: The Book on Business

Planningby Tim Berry free in PDF format.


17/27

Business Cards

Business cards can be easily ordered online from the likes of Vista Print. Be creative with yourbusiness cards and use them to stand out from the pack. A business card should contain the

name of your company and contact information at the very least, and once you get them

printed be sure to carry sufficient quantities with you. The next step is to go networking andto attend events such as Growing Your Own Business and Business Start-up so as to get your

name and your card out there.

Broadband

Fast Internet connectivity is vital for any entrepreneur in the UK given the importance of theInternet for all businesses. Again, it's a case of shopping around to assess which provider will

give you the best option for your circumstances. It is worth noting that the cost of broadbandis related to the speed plus the download size, so it is important to consider your likely usage

in light of these.

Data Backup

Given the extent to which your business will probably rely on computers, you should put a data

backup system in place. There are two main options: remote backup to an online server, orbacking up to an external hard drive. Again, there are pros and cons to both. The cheaper

option is probably to buy an external hard drive such as those offered by Maxtor. These comewith a USB connection and you simply plug it in and back up the files to it (in essence you are

just copying the files to another device). If your business takes online orders or has any

significant digital data needs, you will likely want the additional reliability and security of aremote, online automatic backup. There are a myriad of data backup providers out there. It isreally a commodity offering, so either get a recommendation from someone or go with a lower

cost provider.

Domain Names

A domain name is the name that people type into their Internet browser to get to your

website; for example, you would type www.paloalto.co.uk to get to our main business planningsite. Having a good domain name is an asset, and ideally it will positively represent your

company or product name. After that, it is a case of deciding which countries you want to havewebsites for. Most UK websites will end .co.uk whereas in the U.S. .com is the main domain

suffix, properly called a 'Top-level domain'. You can order domain names in the UK fromproviders such as Net Benefit; again however, as it is a commodity offering, shop around for

the prices and offerings you want.


18/27

Email for Website

Once you get a website up and running and are receiving traffic, you will need to manage emailfrom the Contact us page. While it is tempting to route email to an Outlook account on an

individual computer, this has many drawbacks: its not accessible remotely, you may have

uncoordinated customer responses, and what happens if that computer is down for whateverreason? There are a number of new innovative solutions available that enable remote online

access. We at Palo Alto Software were so dissatisfied with the other email solutions which we

tried that we built our very own product! It is called Email Center Pro and there is a free trial

available at the website; www.emailcenterpro.com .

Fax

Harnessing the power of the Internet means you do not have to invest in hardware, such as afax machine, that you may use infrequently. Dont waste your money buying a fax. Instead

subscribe online to an electronic fax service from the likes of eFax. The number of peoplesending faxes has declined significantly with the advent of email, but in some professions they

remain an invaluable tool. Once you set up, be sure to sign up for the Facsimile Preference

Service to ensure you are on the list of those not opting in for unsolicited faxes.

Free Stuff

All start-ups tend to be very careful with finance after all, there are all these outgoings setagainst uncertain income. From a provider perspective, new businesses can offer a lifetime of

purchasing so they are very attractive as customers. The key with all of this is to assess the

nature of the competition in the industry from which you need to source products, and then tosee whether the service provider is prepared to offer free trials, etc.

Funding

There are numerous different ways to finance a business. The bottom line here is that you do

need to consider which options best suit your needs. You can find a lot more detail regardingthe types of financing available by visiting Bplansco.uk. Similarly, there is also a collection of

financing PDFs available in the resources section there (www.bplans.co.uk ). Finally, as with alllarger decisions, it is worth involving a professional such as your accountant when deciding

upon the optimal financing arrangement.

Google AdWords

The Google search engine is one of the most powerful ways to market to customers. When

users search for products such as Business Plan Pro the results contain a mix of organic

listings and paid for listings. Organic listings are simply the list of website links Google

decides are important. These cannot be influenced by paying more to Google so as to make youappear at the top of the rankings. Paid for listings are the links that people pay for. The


19/27

beauty of this setup, from an advertisers perspective, is that you only pay for adverts that

are clicked on. The Google AdWords system also supplies significant amounts of data, so you

can manage budgets, track Return on Ad Spend (ROAS) and so on. Business Plan Pro 11.0

includes a free 30 Google AdWords Voucher to help get you started.

Google Alerts

Once you have identified your main competitors and the main search terms people use to find

your goods or services, you should set up alerts. Google Alerts is a free process that emailsyou alerts when your chosen terms show up. This is a low-cost way to monitor the activities of

competitors and competitive providers.

Google Analytics

While Google is best known for its search engine, it has been adding to the breadth of its

service offerings over the past few years. With Google Analytics you add some tracking codeto your website and this enables you to obtain rich data about the behaviour of users. Marry

this to AdWords and you can really get a birds-eye view of user behaviour vis--vis theeffectiveness of your marketing. The best thing is that it is free, although Google does get

access to all of your user behaviour data. So if you are concerned about your Internet datayou may want to explore paying for a locally installed analytics tool.

Homeworking

Homeworking, i.e. working from a home office, is an increasingly popular means for people to

start businesses in the UK. There are a number of advantages to this, not least the fact thatoverheads are kept down as the entrepreneur seeks to establish a proof of concept-

generating sales to demonstrate that there is indeed a demand for the product or service.

There are a number of specialised websites that help advise people looking to start a businessat home. Enterprise Nation is one free resource to help you start and grow your business at

home.

Instant Messaging

Along with email, instant messaging (IM) has proven to be one of the most used online

applications for Internet users. By opening a messaging account, you are adding an extracommunication tool to your portfolio, ensuring you can communicate effectively with

colleagues and customers. If you want to offer an IM service to your customers, you can add

applications such as LivePerson to your website. If it is just for in-house communication, free

products such as Yahoo! Instant Messenger will suffice.


20/27

Insurance

It is vital to ensure that you are adequately insured from day one. This is particularlyimportant if there are obvious risk areas, such as public access to premises. In such instances,

you will need Public Liability Insurance. It is also worth undertaking a risk assessment to

understand where insurance is needed across the business. Obviously, buildings and otherassets such as vehicles will need to be insured. If you are providing a service where people will

be relying on your advice, you may also need Professional Indemnity Insurance. Thankfully,

insurance is pretty competitive so its a case of just shopping around.

Legal Structure

The main legal structures in the UK tend to be Limited Company, Sole Traders and

Partnerships. Again the type of business you are in will play a role in helping you decide whichbest suits your needs. I would recommend that this is something your accountant would help

you with, as there are various financial and accounting pros and cons associated with each.

Location

With the increase in entrepreneurship, there has been a growth in the facilities available,

from offices from the likes of Regus to people working from home offices to short-term lets.It is worth taking some time to work out both your immediate requirements and requirements

6 to 12 months down the line. Be prepared to negotiate terms have a walk around thebuilding and try and assess occupancy levels. Obviously this will give you a feel for your

bargaining power. Most office rental options will include phones and Internet, but make sure

you have flexibility to leave if it just does not work out. Many providers will be keen to lockyou into a 24-month contract with two to three months of rent up front. There has been anincrease in hot desking operations which offer you more flexibility if you are a new business

and have yet to generate sufficient sales to suggest that you will have a guaranteed income to

support longer term commitments.

Logos and Branding

You will need to design a logo and brand for your company. While the start-up stage is oftencharacterised by expense after expense, it is important not to cut costs with your brand.

Assuming youll have a website it is worth getting a designer to create a site brand templateand logo to ensure a professional feel. You can see how effective this can be by viewing our

business planning UK website (www.businessplanuk.co.uk) created by Imagist in London.


21/27

Marketing Plan

Once the business is set up, a key requirement will be the need to market effectively so as toattract customers. A marketing plan will help ensure that focus is on the correct areas and

that marketing activities are prioritised. Palo Alto Software producesMarketing Plan Pro

(RRP 129.99), which is ideal for the creation of a marketing plan.

Office Equipment

The cost of equipment has come down a lot in recent years, largely as a result of increasedcompetition but also price transparency. People nowadays would not even think twice about

sourcing office equipment from the likes of eBay. Again, it is a matter of personalcircumstances. Are you going to be receiving onsite client visits? If yes, then it will be

necessary to purchase good quality equipment. If, on the other hand, you are running a websitewithout visitors to your physical location, the aesthetic qualities of the equipment are not as

important.

PR

Public relations is a broad term for activities that help get your name out in the open. It is a

vital part of any marketing initiative, and for smaller companies it can be managed in-house.When you finally launch your offering, a press release is issued to draw attention to the

offering. These press releases are fairly standard and can be released through websites suchas Daryl Wilcox Publishing.

Startup Websites

A number of specialist small-business websites exist in the UK. These offer a range of

products and services and also contain articles, small-business forums, tools and calculators.

The main ones to look at are Startups, UKBusinessforums, Bytestart and SmallBusiness.

Trade Marks

The annoying thing about registering a Trade Mark is that it can be a costly and drawn-out

process. Nonetheless, it is important to ensure that the brand name you have chosen is not

already in use. One quick way to check is to use Google searches to see if any obvious conflictsshow up. After that it is a case of securing a trade mark for your product within certain

geographic areas. Obviously you will also want to ensure that the trade mark is available as a

domain name so people can find you. There are numerous companies that can help with Trade

Marks including RM Online.


22/27

Websites

Practically every business nowadays creates a Web presence to market their wares. It isdefinitely a highly recommended option regardless of your business. Thankfully, it is a very

competitive marketplace so the cost of getting online has come down significantly in recent

years. It is worth doing a competitive review to assess the quality of competitor websites. Youcan then use these to help you map out the sections you require. Once you get a website live,

the next challenge is to get traffic to it. This will be one of the key strands of your online

marketing activities.

Summary and Conclusion

Starting a new business is a very exciting time. It is not a time to make snap decisions when

investing a small amount of time can help ensure you set up on a solid foundation. Thankfully,countless other people have experienced the same feelings you are feeling now, and there are

plenty of resources available, if you know where to look.

This guide is designed to help signpost some of the key resources you need to consider tomaximise the chance of survival. As you will undoubtedly have heard, the first few years of a

new business are the most challenging. While this guide was not designed to be exhaustive, Iam hopeful it will have helped in some small way to reduce the challenges you face.

Finally, it is worth noting that the above recommendations are personal and are not based onany commercial relationships. One problem I feel that entrepreneurs in the UK face is the

reluctance of some advisors to recommend services, given a desire for impartiality. I

disagree with this notion and feel that recommending a few providers is a much better option,and hence, where I have used products or services I have benefited from or are familiarwith, I have recommended them.


23/27

Key Business Plan Resources

1. Business plan competitions

Numerous business-planning competitions are taking place in the UK at any given time. These

competitions test a wide range of skills that are often neglected by entrepreneurs. Byproducing a credible business plan and presenting your case persuasively, you will significantlyenhance your ability to secure funding. These competitions are an invaluable resource enabling

you to road test your business plan in a safe environment before submitting the plan topotential investors.

2. Start-up websites

There are a number of startup websites that can help you understand what needs to be done

and how. These websites normally consist of a mix of articles and relevant products and

services from third-party vendors. Most also have specific business-planning sections to helpyou with your plan. The following three well-known UK sites can give you some further insights

into the building blocks that make up a winning business plan.

Bytestart www.bytestart.co.uk Startups www.startups.co.uk Business Plan Help www.businesplanhelp.co.uk

3. Local advisor

Despite the availability of a range of different online resources, there are occasions whenprofessional advice is highly recommended. While there is undoubtedly a tradeoff

(professional advice usually costs), there are some decisions that should be made only after

consultation with professionals, such as choosing the legal structure of the company. While

local accountants are a natural starting point, there are also a number of other bodies that

can provide information and advice, and can point you in the right direction for more complex

concerns.

Business Link www.businesslink.gov.uk

Business Link provides information, advice and support to help people start, maintain and growtheir businesses. It is an excellent site with some really great sections and clear signposting

to additional resources. There is also a postcode search facility so you can track down your

nearest local advisor.


24/27

4. Funding websites

Entrepreneurs need to consider their financing at the start-up stage and most will look tooutside help to assist them in financing the start-up phase. A good understanding of the

implications of the various sources of funding is important, not least with respect to the

various obligations arising under each. At its most basic, the sources of funding are eitherdebt based or equity based, and each class confers certain obligations on the recipient of the

funds. If the business plan is used to secure funding, it will need to clearly outline the

benefits to the investor, and the terms of investment, as theyll be seeking to assess their

risks, as well as the ability of the firm to generate free cash flows.

Outside of the traditional sources of finance, it is also worth exploring the following sites,

which explain the merits of grant or VC funding. Obviously the conditions for securing eitherare fairly strict, so both sites will indicate which issues you should consider, as well as

information on the availability of the funding.

J4B www.j4b.co.ukThe site allows quick and simple searches of the j4b database of business grants and loans

the most comprehensive database of its kind in the UK.

BVCA www.bvca.co.ukThis is the website for the British Venture Capital Association (BVCA) which has over 170 full

members and contains a directory that enables users to search for a local member.

5. Scavenger by Cobweb

Scavenger reports are essential reading material for anyone starting up a business in the UK.

The Business Opportunity Profiles are reports on specific industries and are updated

frequently. With over 800 reports in total, the range includes everything from Childrens Day

Nursery profiles to Coffee Shop profiles to a profile on Complementary Therapy.

6. Sites with demographic data

There are also numerous resources you can use in assessing likely demand for your goods or

services. Websites such as www.caci.co.uk/acorn and www.upmystreet.com provide extensive

free demographic data about areas based on UK postcode searches. These enable you to build

up profiles of the local population and are ideal when you are looking to set up a shop to serve

the local community specifically. If you want to consider setting up overseas, then websites

such as www.cia.gov/cia/publications/factbook/give an excellent insight into various local

conditions in advance of undertaking more detailed localised research.


25/27

7. Your local library

Finally, libraries can be excellent resources, helping you access information from a host ofdisparate sources. They can be particularly useful for researching hard-to-access data

relating to markets and potential suppliers.

The Business and IP Centre at the British Library www.bl.uk/bipc/ is just one example of anew resource specifically created to support entrepreneurs in the UK. It enables users to

access a range of databases including Amadeus, Economist Intelligence, Mintel, Datamonitor,One Source, LexisNexis, Dialog and the Complete Business Reference Adviser (COBRA).


26/27

Business Plan Pro 11.0 the fastest and easiest way to write a business plan

Business Plan Pro (RRP 79.99) is the best selling business-planning software productavailable in the UK.

It is easy to use and helps you write a business plan in as short a time frame possible. Theproduct asks you a number of questions and after that its simply a case of following theinstructions and working through the pages step by step. If you need help at any stage you can

simply click help or even read a sample business plan from the very industry you are writingabout. With over 500 free sample plans to browse there is something for everyone.

Here are the 10 reasons why we believe that using Business Plan Pro is the best way to writea business plan:

1. Offers significant time saving

2. Provides the structure

3. Includes hundreds of examples

4. Ensures you do not leave out any sections

5. Makes the numbers part easy

6. Free UK Support Available

7. Signposts relevant resources at appropriate points

8. Designed specifically for producing a business plan

9. Risk free (60-day money-back guarantee)

10. Increases your chances of securing funding

Business Plan Pro is available from Paloalto.co.uk, Amazon.co.uk and other leading online

retailers.


27/27

About the Author

Alan Gleeson is the Managing Director of Palo Alto Software Ltd, creators of Business PlanPro. He holds an MBA from Oxford University and an MSc from University College, Cork,

Ireland. For further information on business planning visit the following Palo Alto Software

Websites:

www.bplans.co.uk

www.businessplanpro.co.uk

www.paloalto.co.uk

Guide to Writing a Business Plan by Alan Gleeson

Documents