Business Startup - Stage 2
Start Up Scale Checklist
My business plan needs working on
You have an outline plan, you have done some research and you can show how your business could work if your assumptions are correct. What then?
Almost certainly you need some money. You will probably need some equipment and development resource before you can bring your idea to market. If you plan to work off savings, you need to know how long your money will last and if (more likely when) you will need to borrow some more.
In general, whilst you are employed, money is easy to borrow from a bank. As soon as you are without a regular income it is harder to persuade the banks to lend you anything at all. Banks don’t take risks - that's what investors are for.
So if you aim to get money from a bank the manager will want to see a business plan that shows a good reliable income. In that way you look much more like an employed (i.e. low risk) person and they may lend you money.
If you go to an investor (who could be friend, a business angel or a professional venture fund) they too will want to see that you know what you are doing.
Therefore your good business plan has to show detailed thought and (very importantly) solid justification. For a start you will have to show monthly income and expenditure plans and make sure you have not forgotten anything significant (web site presence, travel, license fees, protection of intellectual property).
Then there are all the business regulations. Do you have to charge VAT? How do you handle National Insurance? Should you start a Limited Company or be a Sole Proprietor?
And the track record and strength of the management team is all important. Anyone can write a wonderful business plan but do you have the skills and know-how to make it work?
Can you sell your idea? Answer these few questions. Be honest and preferably make sure you can persuade your business friend that you are right.
- You have identified some real customers. Why will they buy your product?
- Is there any independent research to support your argument?
- Why will they buy from you and not from your competitors?
- Who and where are your competitors?
- What do your target customers do now (before they have your product)?
- What will be the benefits to them of having your product?
- Will it be crucial for them (their business) or just a lifestyle "Nice to Have"? Put simply, can they do without your product or service?
Remember, your business plan is the evidence of your business thinking and (mostly) it is your sales tool to get money. You are selling right now. You are selling your dream.
Try Banks; Business Angels; Early Stage Seed Funds; POCket award; R&D Grants
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