Welcome back to our 4 part series on Planning a Business. This is an extract of what goes on in one of our planned workshops in the “Blogging for Business” course.
The third stage of your plan is pulling it all together and making it cohesive. You should use this stage to relate your business plan ready to present to any relevant stakeholders. A business plan outlines you plan for your business including day to day operations. It can also be used to identify where your business is heading for the future.
- Business Plan
- Products / Services
- Investors / FinanCe
A Business Plan defines how your business will operate and includes a number of key features
- Products / Services
- Day to day operating procedures
- Legal requirements
- Financial Plan & Operations
|A copy of a business plan template is available as a resource guide in our Business Planning workshops.|
What staff will you need to work in your business? This will depend on the industry and the size of your business. If you are working from home providing support services such as counselling, then you may not need staff – however, you may need someone to help you complete the books for BAS and other legal requirements.
If you are working in a retail situation, then you may want to consider employing a second person to be in the store while you are on breaks.
You may consider hiring family or friends to help in certain situations or to help them obtain work. Be careful that this does not interfere with your personal relationships, as you will be with this person for upwards of 8 hours a day.
You should organise position descriptions for every position that will be filled by staff. What will be their duties and responsibilities? How much will the position pay?
You can check with https://www.payscale.com/research/AU/Country=Australia/Salary to see what the average wage is for any position within Australia, to ensure you are complying with Industry standards.
The average wage for a retail worker is $20 per hour but can range from as low as $16 to $25 per hour, depending on location, years of experience and skill level required.
You may also choose to do a SWOT analysis of your team members to work out what areas they are most suited for. Where can they be helped to improve with further training.
Kate is starting work full-time as a retail assistant. She has been working for the company the last three years on a casual basis, having begun work there during work experience as a teenager. A position for junior sales manager is also available for which she has applied.
You are Kate’s employer.
What skills would you require her to already know to be able to do her current job?
What skills would Kate need to be able to take on the role of junior sales manager?
Products / Services
What products and or services will be available in your business? What are some of the features and or benefits of this product or service and how will you cost the product or service?
Costing a service / time
Generally, services are provided on a time basis. This is where you charge your customer a set amount for a specific service or block of time. A labourer may charge a set fee of $50 to mow a lawn, with the guestimation that it will take no more than an hour. He may then also charge $50 per hour for additional services such as weeding, spraying or pruning.
Costing a product
Products are generally bought at a wholesale price and then resold at a higher price for profit. If you are manufacturing products, you will need to take into account the cost of the materials for the product, plus the time it takes you to create the product and have it packed ready for distribution and sales.
You may also need to factor in GST into your prices.
If you are providing products, you may also need to document where you obtain supplies of the product and or the raw materials, plus how you have worked out your profit margin.
|More information about this costing process is in our “Planning a Business” course|
Investors / Finance
How are you going to finance your business and manage the cash flows is another question you will need to address when starting your business
|20% of new business fail in their first 12 months|
You will need to identify
- Start up costs
- Cash flows for between 2 and 5 years
Start up costs
How much is it going to cost to get your business up and running? Do you need to purchase equipment, or work gear, supplies? Where are you going to get them from? Do you have a preferred supplier list?
How much is it going to cost you to have the business running for the first twelve months? You may need to pay for wages, rent, stock or raw products, gas, electricity, phone, internet, registrations and running costs for vehicles plus any relevant insurances.
Break Even Point
The break even point is the point in which the business has managed to generate enough income to pay back the start up costs and begin to make a profit. As part of your investigation into the viability of your idea, you should examine these projected figures.
Many business do not reach this point until five years of operating. You need to ensure that you have sufficient running capitol to support your business.
AT any given point in the business you will be both spending and receiving money. You will need to spend money to purchase additional stock or supplies, pay accounts and so forth. At the same time, you will be receiving money in the sale of your products and services. You may need to demonstrate to any possible investors how you will manage these cash flows – at what point over the projected period may there be a likelihood of a strain on finances and what can you do to overcome these and keep the business afloat.
|You may need to develop a good working relationship with your accountant to ensure the accuracy of your projections.|
Where is all this money coming from? Most business owners will need to take out a loan against property or collateral in order to be able to finance the business. Some loans could also come from friends or family, or even angel investors. You may also want to consider becoming a public company and selling shares on the marketplace.
Joseph and Catherine took a second mortgage out on their family home and moved home to their parents, renting out the home privately for 12 months in order to raise the necessary collateral for a loan to start their new furniture business.
A copy of financial tables necessary for the business plan is included in the business plan template.
Next: Launching the business