Mark Edwards, general manager at www.rocketlawyer.co.uk, brings you this essential guide to creating the perfect business plan during your lunch break. Follow the six-part series exclusively online each week at www.talkbusinessmagazine.co.uk.
Step 4 – The management team, operations and logistics
The skills and experience of your management team can be an important deciding factor for a potential investor, as is a clear plan on how the business will operate. In this section of the business plan, remember to highlight your own professional attributes, as well as those of any business partners or team members you may have, as it demonstrate your ability to succeed with the new venture based on your track record. You can approach this section a little like an abbreviated CV, noting any key achievements and experience, particularly where they are relevant to the proposed start-up. Remember that investors invest in people – if they have confidence in you, your expertise, your experience and success in delivering any relevant previous projects, they are more likely to have greater confidence in your offering.
There may be certain areas where your team do not possess the relevant skills or industry knowledge. These gaps should, if possible, be filled by a competent management team who will contribute to your business, either as employees or contractors. Explain how any missing skills will be dealt with – for example you could enrol staff in training courses in order to provide them with the relevant knowledge they will need for the job. This is your chance to explain how you will address any weaknesses in your business and overcome them. Proactively doing this will demonstrate to investors how thoroughly you have thought every element of your business through.
If you have already succeeded in securing some level of investment for your business, include the details of existing investors in this section. Emphasise their unique value to your enterprise in terms of skills, experience and the potential to open doors and make valuable connections for your business. Make it clear what their roles and contributions are. There is no point in hiding anything – investors will want to know the details of all those involved in your business if they are going to invest their money into it.
If you don’t already have a LinkedIn account, create one. If you do have one, make sure you update it. This is often one of the first places a potential investor will look when researching the team behind an investment opportunity. You should also encourage other key members of the management team to create or update their LinkedIn profiles. Similarly with social media sites like Facebook and Twitter, create a profile for your business. With personal profiles, ensure both your and your staffs’ accounts are clean and professional! Everyone is allowed to enjoy a social life but you probably wouldn’t want a potential investor seeing the outcome of your wild birthday celebrations.
With regards to your team and employees, it’s important that you assess your requirements realistically. You will most likely want to do as much as you can yourself when starting out, but remember that taking on too much can have the effect of hindering growth as you become overburdened with all the little jobs. Decide which roles will need to be filled by staff so you can plan your hiring process.
If it is necessary to rent out commercial or industrial premises, do consider the expenses of rental and also any utility bills. There are also various types of insurance or licences you may need to obtain depending on the type of business you’re starting. If you have staff, you’ll need to get Employers’ Liability Insurance and if you stock any high value goods, your insurance premiums may be significant. If you’re planning to work with children, you’ll have to make sure all relevant employees are CRB checked and comply with any relevant rules and regulations.
Some businesses will rely on specialised equipment and this can be extremely expensive – it may even be the reason you’re seeking investment – so include full details of any tool requirements along with prices. Don’t forget to do some research into your key suppliers. Find out the pros and cons of different potential suppliers and try to establish accurate cost estimates, which should be worked into your business plan.
Knowing all the steps you will need to take and when you need to make them is important if you want to avoid any hiccups. Outline these details to your investors so as to demonstrate your preparedness for what needs to be actioned should you be successful with your funding request.
Next week we look at step 5 – Financial information and funding requirements