Structure of a business plan – Part 3 of 3
Who will conduct the selling for your business and are they trained to sell? Not everyone is a natural sales person, but, if your business doesn’t have a sales strategy, it won’t achieve its goals. This section of the plan should outline clearly for the reader:
Who is selling and what their track record is in establishing rapport with customers and achieving sales targets;
What selling methods will be used – telephone sales, cold calling, following up leads from mailshots, advertising or networking*;
What sales volumes and activity targets, such as calls per day, you have set each salesperson or selling method. If a sole trader, you need to highlight and quantify the number of calls to customers and volume and activities for each. Naming key customers and sales values for each is powerful and lends credibility to your plan;
How long the sales process is, from customer awareness to them making a buying decision, receiving the product/service and paying for it;
What procedures have you for dealing with customer complaints.
Most readers of business plans have a financial background and are often preparing to invest in the business – be they banks, investors or Enterprise Boards. They pay particular attention to the financial plan. Make sure the sales and costs relate to the previous sections of the plan and include equipment purchasing and staff costs in line with your outline plan. It should include the following:
Total funding needed to start or expand the business and where it is coming from. This is the important bit for the promoter. This is where you lay out your stall;
Cash Flow Forecasts, Profit & Loss Accounts and Balance Sheets for 3 years;
Details on costing and pricing for your product or service.
Use the body of the plan to highlight the headline information. For example, ‘The business needs €XX , made up of €x investment from promoter, €x from lender Y and €x from the Enterprise Board.’ Be sure of your calculations, as any shortfall or additional funding required will be very difficult to source if original business plans have fallen through. Investors will only give you one chance; you have to do what you say you will do.
Confine the detailed spreadsheets to an appendix and don’t forget to clearly outline any assumptions in arriving at the figures. You will be questioned on them and over-reliance on a financial advisor to explain the financials does not build confidence in you with potential investors.
- Networking will be discussed in a later article.
This article is one of a three part series on the structure of a business plan. For more information, contact the Galway County & City Enterprise Board on 091-565269. Our Business Management Programme is designed around completing a detailed and robust plan for both start-ups and growing businesses. Log onto http://www.galwayenterprise.ie and click on our resources page to access a business plan template and guide. Enterprise Boards offer many supports to start-up and established businesses employing less than ten people.