[How To] PREPARING A BUSINESS PLAN

What is a business plan?

A business plan puts down on paper what your organisation will do to turn its vision into a reality. It summarises the activities, systems, skills and resources needed to achieve your short, medium and long term goals.

Why prepare a business plan?

A good business plan will:

1 help you plan for the future

2 assess strengths and weaknesses

3 highlight risks and opportunities

4 guide your organisation’s activities

5 show how you will monitor success and manage setbacks

6 establish credibility

7 demonstrate that your organisation can successfully carry out the existing and new projects

8 show that your plans are feasible and realistic.

The process you go through to produce a business plan is valuable in itself as it makes you think realistically about your organisation and its plans.

Your business plan should be prepared by a team of key people in your organisation and involve all the key staff, committee members, volunteers and service users if appropriate.

It is an opportunity to consult with a wide range of people and find out their views. This will help to ensure that everyone in your organisation understands and is happy with your business plan. If everyone is in agreement your organisation is more likely to achieve its aims.

What your plan should include

Your business plan is a statement of intent. It should provide details of how you are going to develop your business, when you are going to do it, who’s going to play a part and how you will manage the money. Clarity on these issues is important if you are looking for finance or investment.

There is no set list of things to include in a business plan as this will depend on your organisation.

Here is a list of some of the things you might want to include:

Information about your organisation

Its aims, its history, the background to your work (for example, information about your area or the people you serve) and its finances.

Your people

Your committee members, staff and volunteers, including their skills and experience. You may want to include a diagram showing your staffing structure.

Your work

The services you provide and who benefits. Again, you may want to include a diagram showing how different services fit together.

Your plans for the future

Plans to develop current activities and plans for new services and projects, including how they will be managed, staffed, marketed and financed. Show how this is different from what you do now and include an analysis of need and a survey of similar or related services or projects provided by other organisations. You might also analyse your organisation’s strengths and weaknesses and any opportunities and threats (this is called a SWOT analysis) and how will you respond to these.

Your finances

How your organisation and its projects will be funded. You can show this through budgets together with the details of where the money will come from.

You should also consider including a cash flow forecast. Cash flow forecasts show how much money you will receive and spend on a month by month basis, together with the balance you expect have at the end of each month. This helps to plan your expenditure so you are able to pay your bills.

Funders use this information to check that your financial planning is sound and that your organisation will be financially healthy.

Backing up your plan

Your business plan must show that your plans for the future will work. So you might include an analysis of the risks involved in a new project, details of the assumptions you made when planning and how you will react if things do not go to plan.

Putting your plan into practice

Here you could include a timeline of key tasks and activities or work plan for the first year of new projects. Think about how you will monitor and review your plan and who will be responsible for this.

How detailed should the business plan be?

Just as the content of your plan will depend on your organisation, so will the amount of detail you put in. You may need to include more detail if your work is new or complex.

If you are a new organisation you might concentrate on why you were set up. But if you are more established you will probably spend more time on your track record.

Make sure that the project you want us to fund is easily identifiable within your business plan.

Presentation

Your business plan does not need to be a glossy document with lots of colour pictures diagrams and jargon. It is more important that the information is clear and easy to understand. Although you need to include the amount of detail that’s right for your organisation, a large document may not be very workable. It may be difficult for you and us to find important information. If your business plan is large you may not use it and other people are less likely to read it.

Whatever the size of your business plan, it is always useful to have a contents page.

A sample template that you might want to use follows

You can find further information about business plans at www.nzte.govt.nz and www.biz.org.nz

Business plan template

TABLE OF CONTENTS

1 Organisation information

2 Business information

3 Market survey

4 Marketing strategy

5 Pricing policy

6 Sales analysis

7 Legal requirements

8 Skills of personnel

9 Operations information

10 Financial forecasts

SAMPLE BUSINESS PLAN

BUSINESS NAME Frontline Security Limited

ADDRESS 6 Dennis Way Island Bay Wellington PHONE 0211554248 EMAIL ADDRESS jordanmorr@gmail.com

BACKGROUND INFORMATION

WHAT WILL THE BUSINESS BE? What is the product you intend to sell or the service you will offer? General Security and specialised security services customed to the demands of the customer

LEGAL STRUCTURE Are you trading under your incorporated society, charitable trust or a not for profit company? If you are a not for profit company who are your shareholders? What licenses or permits will you need? I am a registred company

BANK DETAILS

ACCOUNTANT’S DETAILS

MISSION STATEMENT To provide outstanding security services for our clients and would be unstanding or their needs before they are.

EXECUTIVE SUMMARY Key features of the business opportunity. This is a start-up business having being registered as a limited liablity company early in 2007. The aims and objects of this business aventure is to provide the service that will employ two directors initally and as the company grows will employ a number of others. The business features full professional personal, domestic and general security sevices for private functions, security monitoring and commercial work.

BUSINESS OBJECTIVES Short term Develop a strong client base that will yeild better business opportunities. Long Term Have a well grown business that will employ up to ten security officers

MARKET SURVEY Who is interested in this product/service? Who are the competitors? Anybody that has a business, social function or event. Competitors The competitors are already in the market place. There are few barriers to entry into this business, hence the competition will be strong

MARKETING STRATEGY Identification of Market ·1 how and where will you sell your products/services? Currently the directors are existing security officers and have networked with existing cliets who will use our services once we become established. ·2 who are your customers/clients? Most business have the need at one time or another to use the services of a security firm. We have a client list of ten business's at the moment and this will grow through anticipated referals ·3 what is your pricing policy? How much will you charge for different customer segments, quantities etc? Our policy is to provide a competitive service that will reflect current market prices. How will customers know about your business? We will produce marketing literature but most of our nusiness will come from word of mouth because of existing satisfied clients. Do you have a sales plan, will you sell by phone, face to face or through an outlet, posters/leaflets A large protion of our business will come via referral, However flyers are being prepared for general distribution.

PRICING POLICY Describe your pricing policy explaining how you decided what to charge per hour, per job or for items sold. This has already been determined on the basis of a competitive market that limits the price sensitive service Set out what you have built into calculations. Don’t forget to include all overheads. Remember to cover unproductive time, such as ·1 travelling these costs will be minimal as most of our work will be in the CBD ·2 administration costing a computer program that will cover all administration requirements ·3 getting quotations are done on a face to face negotiation. We have a quote template developed that will considerably reduce time spent. ·4 development of courses/programs We already have a training program for new employees when they start with us. Our training will be ongoing throughout employment we have a strong qualty assurance ethic.

SALES ANAYLYSIS Detail how many items/ services/jobs/ you intend to sell per month, over the next 12 months. We already have a existing demand for our services, however, it is inticipated that our conversion ratio will be one successful tender for every five enquires Explain how you will meet this target. Be realistic and remember to allow for any seasonal variations. Our target will be met through a call volume of four structured telephone calls per day.

LEGAL REQUIREMENTS OSH: ( Package ) GST/Income tax : Registration as a security service: Police

YOUR TEAM’S SKILLS Your business plan needs to set out the structure and key skills of both your management team and your staff. It should identify the strengths in your teams and your plans to deal with any obvious weaknesses. Include a paragraph on each individual in your management team, outlining their background, relevant experience and qualifications. Include any advisors you might have such as accountants or lawyers. Jordan Morris Security Specialst 4 yrs Security Management 1 yr

HUMAN RESOURCES Are your HR policies current? Do they meet the all the relevant legislative requirements? Yes, this is in place

YOUR OPERATIONS Your business plan also needs to outline your operational capabilities and any planned improvements. Location: ·1 what are your long term commitments to the property? ·2 do you own or rent it? we rent a office $150 per week ·3 what are the advantages and disadvantages of your current location? There is no stock inventory

Management – information systems Have you got established procedures for stock control, information management, accounts management and quality control? Yes, We have a management accounting software package that will report financial information directly to our accountant. MYOB ( mind ou own busness ) Information technology (IT) is a key factor in most businesses, so include your strengths and weaknesses in this area. Outline the reliability and the planned development your systems. My experience in IT second to none, I have no doubt as to my capeablillties in this matter.I have already developed a business web page for my business and helped developed in others.

Financial forecasts As part of your plan you will need to provide a set of financial projections which translates what you have said about your business into numbers. You will need to look carefully at: ·1 how much money you need 1000 dollars will be a startup cost for equipment and uniforms ·2 where you will get that money (revenue and income) I am self funded for the early startup phase eventually we will need addional capital of 5000 dollars to manage us through the second growth phase. Initial cash flow will fund immediate needs. Financial planning You should attach a financial forecast table that should run for the next three years. The first 12 months should have the most detail and should be shown month by month.