I like writing business plans. I know it makes me a little nerdy but there you go. I love to see ideas develop and formulate themselves into a plan for a business that will grow and thrive. Of course, you have to make assumptions. Of course, you get things wrong. But you have to begin somewhere and putting your ideas down in paper is a good start. You can get help from people like Britain’s Energy Coast.
Our business plan for The Coffee Kitchen ran to thirty pages with another ten pages of appendices attached. Every business plan we have ever written has eight sections: an executive summary, business structure, business overview, marketing, operations, financials, the future and a series of appendices (normally a bunch of spreadsheets). You write the executive summary last, once you have all the other parts in place. It’s a sort of simple overview of the rest of the business plan.
We normally start off with the business overview, writing down what we expect to do. This then finds its way into a series of spreadsheets as we cost out the business that we’ve been compiling. How much should we charge for our products? How much do they cost? What other costs are there?
We put together a series of scenarios: best case, average case, worst case, and disaster case; each one getting progressively more pessimistic than the last. If you can survive the disaster case scenario you can survive anything. Cash flow is vital – make sure you don’t run out of money to pay the bills.
Once you’ve got the financials together, you can then write the rest of the business plan. At this point, we secured the premises on Challoner Street. We then had to make adjustments to our plan including accurate predictions of rent, an idea of electricity usage and small adjustments to our sales. They say location is everything but we’d have had to sell a shedload more of coffees if we had been located on Main Street.
Once we had finished the plan, we looked at three and five year projections. We were in this for the long term and we needed to know how it would look in the future.