Preliminary information this will include the basic information about the company; present, and future. That is, there should be information, about the evolution of the market and product concept. Information is necessary as well about the company's current position. What is the company's future strategy? What are its goals and what actions are required to achieve its goals?
- Name of business
- Mission statement
- Location
- Physical size of business
- Type of owner ship
- Goals and objectives
Marketing plan is a key part of business success. You need to decide which customers to target. You need to work out how you will reach and win new customers. You need to make sure that you keep existing customers happy. And you need to keep reviewing and improving everything you do to stay ahead of the competition.
A good marketing plan starts by looking at your overall strategy, and the business environment you operate in. It builds on your own strengths and weaknesses to work out what your marketing strategy should be. It sets out clear objectives and explains how you will achieve them. Perhaps most importantly it looks at how you can ensure that your plan becomes reality.
- SWOT
- PEST
- Ansoff matrix
- Product life cycle
- Boston box
- Primary and secondary data
- Competition threats
- Prices
- Promotion
- Distribution
Production plan this will include the aspects of the business where there is a product or service. This section will show how they are produced I will include:
- Production methods
- Equipment
- Quantity
- Timing of production
Financial plan
Think about your sales and marketing strategy, include information on how the product or service will be priced, channels to market, advertising and marketing plans as this will cost my business a lot of capital with no profit straight way.
Details of key employees and their relevant experience are also important, as is operational information like my business location, special equipment and expected employee headcount.
Stating the financing I will need, based on your financial forecasts.
My plan should also include a sales forecast, cash flow forecast and a projected profit and loss account for up to a year ahead a balance sheet will be constructed as well. The figures used must be reasonable - avoid being over optimistic. The involvement of a qualified accountant in preparing these forecasts is recommended.
Human resource plan
This will include 1. The number of employees needed 2. Skills needed 3. Recruitment methods I will use. 4. Training needs of employees.
Constraints I will take into account that there are a number of constraints that may impact on the implementation of my business plan I will show the main constraints which are:
- Legal
- Financial
- Social
- Environmental
- Technological
- Competitive.
Aims and objects
When a sole trader sets up they may have some unstated aims or objectives - for example to survive for the first year. Other businesses may wish to state exactly what they are aiming to do, Tesco want to become market leader in their field and stay there.
An aim is where the business wants to go in the future, its goals. It is a statement of purpose, e.g. we want to grow the business into a franchise.
Business objectives are the stated, measurable targets of how to achieve business aims. For instance, we want to achieve sales over 50% in one year.
A mission statement sets out the business vision and values that enables employees, managers, customers and even suppliers to understand the underlying basis for the actions of the business.
Business Objectives
Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards to its stated aims.
Smart target are set up it clearly states how a business can achieve a goal or objective
S – Specific – objectives are aimed at what the business does, e.g. to increase sale by 25% in the summer period, an objective specific to that business.
M - Measurable – the business can put a value to the objective, e.g. £10,000 in sales in the 6 months of trading.
A - Agreed by all those concerned in trying to achieve the objective.
R - Realistic – the objective should be challenging, but it should also be able to be achieved by the resources available.
T- Time specific – they have a time limit of when the objective should be achieved, e.g. by the end of the year.
Alternative Aims and Objectives
Not all businesses seek profit or growth. Some organisations have alternative objectives.
Ethical and socially responsible objectives – organisations like the Co-op or the Body Shop have objectives which are based on their beliefs on how one should treat the environment and people who are less fortunate.
Health care and education establishments – their objectives are to provide a service – most private schools for instance have charitable status. Their aim is the enhancement of their pupils through education.
Charities and voluntary organisations – their aims and objectives are led by the beliefs they stand for.
business may change its objectives over time due to the following reasons:
A business may achieve an objective and will need to move onto another one (e.g. survival in the first year may lead to an objective of increasing profit in the second year).
The competitive environment might change, with the launch of new products from competitors.
Technology might change product designs, so sales and production targets might need to change.
Sole trader
Being a sole trader is the simplest way to run a business, and does not involve paying any registration fees. Keeping records and accounts is straightforward, and you get to keep all the profits. But you are personally liable for any debts that your business runs up, which can make this a risky option for businesses that need a lot of investment.
Management and raising finance
- You make all the decisions on how to manage your business.
- You raise money for the business out of your own assets, and/or with loans from banks or other lenders.
Records and accounts
- You have to make an annual self assessment tax return to HMRC.
- You must also keep records showing your business income and expenses.
Profits
Unlimited Liability
As a sole trader, you are personally responsible for any debts run up by your business. This means your home or other assets may be at risk if your business runs into trouble.
Partnership
A partnership can be two or more people, and they share both the profits and liabilities of the business. The responsibility and financial risks are shared, but legally all the partners will be “jointly and severally liable” for any business debt incurred. This means that you personally can be liable for debts run up by another partner. It is vital then to have a partnership agreement in place, so that all partners have equal rights.
Simple money matters can cause huge problems, especially if the business seems to be profitable! It is wise to cover all eventualities for you and your partners’ protection, peace of mind and for the long term business benefit.
As circumstances and expectations change, it is worth asking certain questions such as:
What happens to a partner’s share if they die?
Who has the power to write cheques and authorise payments?
How much holiday can you each take?
What if a partner dies, is on long term sick or wants to leave?
It is essential to have a formal partnership agreement drawn up so everyone is clear about company ground rules before you start. It should be discussed with your accountant, and then drawn up by your solicitor.
Advantages
- Shared risk.
- Shared management.
Disadvantages
- Risk of conflict between partners.
- Shared decision making.
Private limited company LTD
A Company owned by shareholders. A limited number of shares are issued, these are owned by family and friends of the business. The business has limited liability.
Public limited company PLC
A Company owned by shareholders. It must have £50,000 of capital when founded, and may allow its share to be bought by the general public (though it does not have to). The business has limited liability.