This guide will introduce you to the process of writing and preparing your first business plan. It includes: What is a business plan? Why do you need a business plan? Some points to consider before you start your business plan
Benefits of preparing and writing a business plan Before you start The planning period How to make your first business plan
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Consult our Business Plan Contents Guide to find more about what to include in your plan and our Cash Flow Guide and Template to help you with presenting financial information.
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What is a business plan? Quite simply, a business plan is a document that states five clear points: •
What you aim to do.
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When you will do it.
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Who you are doing it for.
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Where the money to do this will come from.
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When and how that money will be spent.
It is usual for the plan to cover a three-year period.
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Why do you need a business plan? A business plan is a vital tool in ordering and defining your working process logically. It should work for you as a checklist, to ensure you have considered all the elements in establishing and running a successful business. Crucially: will it work, will it provide an income for you to survive on, and does it have longevity? It is important that your business plan works as a selling document that proves the value of investing in your work, in a clear and concise manner.
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Your business plan will be examined by funding bodies, banks, financial institutions, and advisory bodies who will be used to seeing similar plans on a daily basis. It is important that your plan is clear, concise and considered, and that it stands out from the crowd.
Consider your target recipient and the information they require; the information that will enforce your business viability should be presented in a language and format they are familiar with.
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Your business plan should become an important working document that evolves with your business. Once your business is up and running, it can be a valuable tool to use as a reference point. Refer to your original aims and ideas as set out in the plan on a regular basis, and use them to check that your work / ideas are progressing as expected. •
Are you achieving things at the rate (in the timescale) you initially planned?
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Has your business or work modified or changed direction?
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Do you need to consider modifying your business plan to suit the 6/25
needs of your changing and developing work?
Keep your plan updated – some people have a ‘rolling’ plan, rather than a finite three-year plan. Don’t be disheartened by an initial rejection from a bank or funder. The right business plan will take time and consideration to develop.
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Some points to consider before you start your business plan •
What is the purpose of your work?
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What are your aims and objectives?
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Who is the plan for?
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Is your idea viable?
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Can you afford it?
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Do you have the necessary skills to achieve this?
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What are your strengths and weaknesses?
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How do you start?
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Where can you get help?
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Where will the money to support this venture come from?
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How could additional funding support and develop your idea?
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Does this project / idea have long-term potential?
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Where is your work placed in a local, regional, national and
international context? 9/25
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Are there other artists working in the same field that could assist or support your venture?
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Is there space in the market to accommodate your work?
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What happens in the case of rejection (if you are submitting your plan to a bank or funder etc.)?
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Do you need a contingency plan?
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Benefits of preparing and writing a business plan Preparing a business plan will force you to clarify exactly what it is that you do, and what you want to do. It will force you to describe and explain your work and to put your ideas down on paper in a clear and concise manner. Your business plan will logically define your proposal for turning your skills, talents or creativity into a viable and, hopefully, sustainable business venture. A business plan offers you a stronger opportunity for your business to succeed and a better chance of longevity and development.
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Your business plan will: •
help you to set your objectives, including short and long-term goals
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help structure the process for establishing your venture
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offer you the chance to analyse, survey and understand your target audience; determine their requirements, the demand for your product, and how your work will ‘sell’ to them
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highlight opportunities which could assist your venture
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make you assess your skills and strengths in the broader context of your working contemporaries
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consolidate and clarify your ideas and abilities
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highlight any flaws or impracticalities in your aims and objectives
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present you with the financial realities; the plain facts of whether your business is likely to succeed
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help you to formulate a best and worst case scenario, and plan of action for each of these
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help you to research potential sources of funding
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be an invaluable aid to growth and development by supplying the information you need to develop the best and most suitable work
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A business plan is essential in the application process for a number of grants and investment, e.g. Scottish Enterprise, Lottery, Local Authority and Creative Scotland. It is also a vital tool in applying for alternative sources of funding, sponsorship and match funding. It is a useful document for any individual or organisation considering
capital development or a long-term or large-scale project. The planning process can be as valuable to a business as the finished product itself. 14/25
Before you start Consider why you are writing a business plan. •
Do you have a viable product?
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Do you have a viable proposal?
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Do you have the necessary skills?
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Does your project have longevity?
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Does your work have an audience?
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Does your work have a market? 15/25
Consider who will be read your business plan. Think about the approach you will need to construct the document, including design, language and professional presentation.
Your business plan will be examined in great detail before an investor will consider putting money into the proposition. They will need to consider the likelihood of success for the business or project and
potential for return on the original investment. This could be either in terms of growth, profit or development of audience and product, depending on the type of funder or investor. 16/25
Banks prefer to invest in a secure, considered business that will provide slow growth, a steady return and cash flow that will meet the repayment plan.
Remember that banks and funding bodies may spend no longer than forty five minutes assessing your proposal, so be clear and organised in your plan.
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The planning period Making space to evaluate your desires and needs is an invaluable part of planning your business. Don’t rush headlong into the venture without considering the long-term effects of your actions.
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Planning is about: •
self-evaluation
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identifying your strengths and weaknesses
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setting objectives – achievable and measurable short and long-term goals
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forming a clear plan of action – describing how to achieve these, what you will do
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researching all available options in helping your project succeed
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designing and installing systems to monitor your progress and 19/25
success
A SWOT (or SCOT) analysis is useful tool to use during your planning period; use it to address your Strengths, Weaknesses (or Challenges), Opportunities and Threats.
To maintain your motivation and be successful, your business must balance the things you are passionate about with what you are best at, and provide enough finance to sustain you. You will need to make revisions if you do not have this balance. Embarking on a plan that is weak in any of these areas is likely to lead to disillusionment, burn out and financial difficulty. 20/25
How to make your first business plan •
Take your time! Do not attempt to tackle the whole plan at once – deal with small sections at a time.
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Prepare and research; gather as much information and evidence
as you can to support your ideas, and analyse different approaches and models to inform your presentation. •
Be thorough.
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Do your market research; build a picture of your audience, and where and how they will access your work. 21/25
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Work with what you know first, and research other areas as you progress.
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Use clear simple language, and a clear legible typeface.
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Don’t over-use jargon, but do express your technical knowledge.
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Use bullet points where possible, and opt for short, readable
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Express your enthusiasm and commitment to your project; communicate your belief in the success of your venture. 22/25
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Since you are a creative business, you may want to have a creative element to your presentation (e.g. a visual artist may want to include visuals), without going to extremes.
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Ensure that your document is logical, prepared and presented to a high standard, and that the contents are verifiable.
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Ask people to comment on it, e.g. friends, relatives, peers, Cultural Enterprise Office, Business Gateway.
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Finally Remember your business plan will benefit you. It will: •
act as a summary of your business proposal
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offer people a document that they will easily understand
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act as a sales and marketing tool for funding and financial support
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professionalise you and your business venture
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work as a useful guidebook to direct and check the direction of your business and keep you focused. Refer to it whenever you feel that you may be losing direction. 24/25
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help you monitor your progress
Next steps Please refer to the following relevant Cultural Enterprise Office resources: Business Plan Contents Guide Cash Flow Guide and Template SWOT Analysis Template – situational analysis tool for
detailing Strengths, Weaknesses (Challenges), Opportunities and Threats
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Disclaimer: Cultural Enterprise Office is not responsible for any advice or information provided by any external organisation referenced in this document.