How to Write a Bulletproof Business Plan

If you want to know how to write a professional business plan, you've come to the right place.

I write tonnes of business plans for clients, but most people who call us don't really want a business plan... they want the benefits that having a bulletproof plan of action gives them.

Business plans are essential if you want to secure funding for your business, either through bank loans or private investment, and they're the perfect tool for making sure your new business idea is a good one (and by that I mean that it will make money rather than lose money) before jumping head first into the unknown.

A good business plan gives entrepreneurs and business owners confidence knowing that there is a market for their products and services, what people are likely to pay, the best places to advertise and market their business, and most importantly - how profitable (or not!) their business is likely to be.

In other words, it's your personal roadmap for business success.

Alas, most people's heart will sink when asked for a business plan because it's a whole lot of work and requires skill sets that are often outside most 'entrepreneurial' people's comfort zones, which is why our 'done-for-you' business plan writing service is so popular with clients. We do all the leg work so you don't have too, but if you do fancy turning your hand to some business plan writing this blog will give you all the information you need to help you create your very own Bulletproof Business Plan.

The first thing you should consider is; what do I need this business plan for? Are you looking to secure funding? Pivot your business into a new sector? Map out how you're going to achieve that next phase of growth in a changeable economic landscape?

Every business needs a PLAN but not every business needs a traditional business plan.

Making sure you set realistic business goals, manage your finances and create successful strategies to help you achieve those goals (without running out of money in the process) is pretty damn important in any business, but that doesn't mean you need to sit down at a computer for days writing out a traditional business plan.

In my experience, the time when most entrepreneurs need a business plan the most is when they are looking for investment or applying for a loan.

After all, you know your idea is a winner, but how do you convince someone else? Particularly someone you're expecting to give you a boat load of cash to help you turn your idea into reality.

Or perhaps you're considering moving into a new sector - unchartered territory - and you want to make sure you fully understand what it is you're about to get involved with to make sure you don't fall foul of the law and that there's going to be enough profit in it to make it worth the effort...

The answer is to develop a solid business plan.

So, I'm going to take you through the whole process of writing the type of fully comprehensive 'Bulletproof Business Plan' that has seen 100% of our clients achieve the funding they need and guide their businesses from start-up to success.

There are 10 core elements to every 'Bulletproof Business Plan':

1. Executive Summary

2. Product/Service Overview

3. Market Research

4. Competitor Analysis

5. Marketing Strategy

6. PESTLE & SWOTT Assessments

7. Goals & Objectives

8. Operational Strategy

9. Financial Projections

10. Contingency Plan

Right, let's go through each of these in a bit more detail to help you better understand how to complete each section.

Executive Summary

Although this is the first section of your business plan, you should leave writing this until last. It needs to be strong, captivating and should inspire the reader to want to read the rest of your plan. Remember, keep it short, and try not to waffle!

This is where you will write a brief summary of what the business will be, what will you be selling, what services are you providing, and where will you sell/provide those services. Include the background to your idea (i.e. who owned the business previously, progress made to date, when did you start trading and what is the current ownership structure).

If you're looking for investment make sure to include a brief summary of how much investment you need, how it will be used and how it will make the business more profitable in the long run. This is the first section a potential investor will read, so make sure it captures their interest quickly!

It's also helpful to include the business owners/partners details here, including names, addresses and equity stake in the business (how many shares does everyone own, and who has ultimate control over decision making). What are the owners backgrounds, training and experience? What will be their primary roles in the business? Only include a brief summary here, and attach any relevant CV's in the appendix.

Product/Service Overview

Here is where you'll describe the product/service you will be selling in detail.

For example, if you're offering a service describe all elements including any maintenance services and add-ons.

Why will your customers buy from you and not your competitors? What makes you different and what benefit does it offer?

Tell the reader where you intend to sell/provide the product or service; such as geographical area you will cover, whether it is an on-line shop or physical premises.

Are you going to be selling business to customers (B2C) or Business to Business (B2B)?

How will you sell it? Will it be cash on receipt, will you offer 30 day credit terms or use an on-line payment system?

What will your pricing structure be? How are you going to decide how much you will charge? Make sure this part reflects what you have written in your cashflow projections.

Market Research

Your Target Audience

1. Who are you aiming the product or service at?

2. Are they the end user?

3. What are their specific demographics?

4. Where do they usually buy?

5. If this is a large sector – which segment of the market are you concentrating on?

The Market Size

1. How big is the market you are looking to tap into?

2. How large could your share of the market be?

3. Is there a gap in the market?

4. Is it an existing market or a new product/service?

5. How many people are likely to buy from you and how often?

Threats & Trends

1. What are the current trends?

2. What is driving those trends?

3. What could change and when?

4. How will your product/service disrupt the sector?

Competitor Analysis

For this section jump on to Google and search for businesses that are already operating in your sector - find 3-4 that have websites, social media pages and visible customer testimonials and research everything you can about what they're doing well, and what they're not doing so well

This bit can take some time but it also hugely valuable and insightful.

Consider:

1. Where are they based? What geographical area do they serve?

2. What's their pricing structure?

3. What are their strengths?

4. What are their weaknesses?

5. How will you build on their strengths and avoid their weaknesses? How will you compete? Why will customer come to your business instead?

6. How will your competition react to a loss of their market share? How will you respond?

You can learn a lot from your competitors so put the effort into this research. It'll tell you two important things; what to do, and what not to do.

Marketing Strategy

For this section consider how you will position yourself in your marketplace; are you providing a premium quality service, or will you cater to lower end budgets?

What will you focus on as your unique selling points (USP's)? Will it be excellent customer service? Features and benefits? Filling a hole in the market? Decide which ones you want to focus on and detail them in this section.

Where will you market/advertise your product or service?

Explain the different types of advertising you will use. Think about your target audience and where they may go to get their information from, i.e. google, newspaper, radio, and social media.

Ask yourself; where do my ideal clients go first to find solutions to the problems they are facing? Where are they looking for me? This is where you should be focusing your marketing efforts.

How will you market/advertise your product or service?

Describe how you will use each of your chosen marketing channels to tell your customers who you are and how you can help them. Consider;

1. What do your competitors do?

2. What are you currently doing, and what could you do to improve your results?

3. How will this change across each of your target market segments?

4. Are you marketing a specialist product with unique features|?

Then detail how much you will spend on each marketing activity - consider setup and on-going costs and make sure these are reflected in your cashflow projections.

Think about the hidden costs of marketing; how much time will it take for you or a member of your team to manage each marketing channel? How effective are you expecting each of your marketing channels to be? What are your target conversion rates?

Consider key financial metrics such as:

1. How long it takes to make a sale

2. The average expected order value

3. How long it takes to get paid

4. The likelihood of repeat orders

5. The lifetime value of new customers

6. Customer acquisition costs

And remember to build these into your cashflow projections!

PESTLE Analysis

PESTLE is a tool used by marketers to identify macro-environmental factors that may significantly impact a business, and is often used to inform and develop the 'threats' and 'weaknesses' sections of the SWOT Assessment. Here's what the acronym stands for:

• Political - includes things like current and future taxation policies, government stability, availability of grants, funding and initiatives, effects of wars or worsening relationships with other countries, and current political issues

• Economical - includes things like national debt levels, strength of consumer spending, current and future levels of government spending, current and future level of interest rates, unemployment and inflation, and supply volatility

• Social - includes things like consumer attitudes and opinions, pandemic lifestyle trends, digital relationships, religious and ethnic factors, media views, major events, consumer buying patterns and influencer messaging

• Technological - includes sector specific technology demands, how consumers make purchases, technological innovations relevant to your sector, rights to intellectual property and copyrights, global communication channels

• Legal - includes changing legislation relating to employment, competition, health and safety, environmental initiatives, changes in the law, pandemic restrictions, trading policies and regulatory bodies

• Environmental - includes things relevant to global warming, use of plastics, how we recycle and up-cycle, the potential environmental impact of our products and services (pollution/waste), our relationship with renewable energy, and the general attitude to these environmental factors from the government, the media and consumers

SWOT With An Extra 'T'

There are 4 main parts to a traditional SWOT Assessment, and here at Bulletproof Business Services we like to add a bonus 'T' that a lot of people don't consider, but which can make a huge difference to the success of your business.

• Strengths (quality, management team, IP, unique selling point, branding, cash reserves)

• Weaknesses (lack of finance, small customer base, insufficient skills, high operating costs)

• Opportunities (gap in the market, increased demand, favourable economic conditions)

• Threats (economic downturns, new competitors, changing technologies, Brexit)

• Trends (increased technological automation, environment friendly initiatives, spending habits)

Strengths and weaknesses are typically things that are internal to you and your product/service, whereas opportunities, threats and trends are typically things that are external to you and your product/service.

Your PESTLE analysis will give you detailed insights into the potential threats and weaknesses your business may face, and this should be completed first so it can be used and referenced when developing your SWOTT assessment.

Goals & Objectives

What are you aiming to achieve in the short, medium and long term future of your business? In order to achieve great results with anything in life it's important to decide what your goals are using the classic SMART goals principal developed by Peter Druker.

In short, make sure your goals are specific, measurable, achievable, realistic and time based.

Consider; what's the end purpose of the business - will you build it up and pass it on to a family member? Setting it up and growing it to one day sell to a competitor? Will it be a relatively small 'lifestyle' business employing just you and a few staff, or will it be a multi-million pound global corporate one day?

Here's a few more things to think about when developing your goals:

1. What level of income/revenue are you aiming for?

2. How profitable will your business be?

3. Where do you want your brand to be recognised? Will you win awards, be featured in the media?

4. How many new customers do you want to have during each period? What will your retention levels be? What will be your customer satisfaction rating?

5. What new products or services will you introduce and when? How will you improve your current products/services, and on what timeframe?

6. What size will your team be, and when will you hire more staff?

Your short term goal should be the things you want to achieve in Year 1, medium term goals are years 2-3, and long term goals cover year 4 and beyond.

Use bullet points to create specific goals that inspire you. And remember, keep them SMART!

Operational Strategy

In this section you need to think about these 4 core elements of how you will manage and operate your business:

1. Management & Personnel

2. Premises & Equipment

3. Legal Requirements

4. Information Management Systems

So, let's take more detailed look at what you will need to consider for each of these elements of your operational strategy in turn.

Management & Personnel

Here you'll need to map out all the different roles in your business, how they connect to each other, and how each role is held accountable.

A great way to do this is to list out all the different roles you will need in your business (and you'll probably be doing most of them if you're just starting out) from HR, to sales and customer service, and then organise these into an organisational chart.

The organisational charts we develop always have 4 levels:

1. Managing Director/CEO

2. Director Team

3. Managers

4. Frontline Operatives

Thinking about it in this way helps to segment the different roles into departments, and helps with visualising lines of accountability in your business. The operatives report to the managers, the managers report to the directors, and the directors report to the MD/CEO.

Another really important part of this process is to decide on 3-5 key performance indicators (KPI's) for each role so that the people who fill those roles clearly understand how success and failure are defined in their area of the business.

Remember to include roles in finance, sales, customer services, production/delivery, and administration.

Once complete, look at where there may be skills gaps and consider how you might fill them. You might also want to consider the following:

• What is your recruitment plan?

• How will you train your staff, and what are the associated costs of doing so?

• What salaries will you pay each person in their respective roles?

• How will you achieve high rates of staff retention?

• How will you measure productivity? (this part is where the KPI's become really important)

• What will you do if you lose a key member of staff? What's your backup plan?

Premises & Equipment

Here you need to think about things like where the business will be based and what type of premises will be required to support your business operations - do you need warehousing to store stock or just a small office to give you a professional space to meet with clients and complete admin work? Do you need a premises at all... could you and your staff complete most of their work from home?

If you do need a premises, what type of lease agreement will you be looking to secure, and over what period of time?

Will you need planning permission to adapt the premises to meet your operational needs, and if you have a commercial premises in mind does it require a change of Use Class? If you have a premises in mind, it's always helpful to include a copy of the Heads of Terms (the 'contract before the contract') in the appendix of your business plan.

You need to consider what equipment you'll need to effectively run your business too - from computers to production equipment and logistics vehicles.

Some other things to consider are:

• The advantages and disadvantages of this

• Expansion plans - will you need to relocate? When might that happen? What would be the implications of doing so?

• What are the production facilities like? When were they originally installed and what life span can you expect from them? Are they sufficient to meet your expected demand?

• Who will your key suppliers be, how will you select them, and what will you do to replace them they stop supplying you?

• Can you move in and start trading straight away, and if not can you negotiate a rent free period?

Taking on commercial premises isn't always the best choice early on, but in some cases is essential - either way, it's a huge commitment so make sure you do your research and build all the costs into your cashflow to prove affordability and start-up capital requirements.

Legal Requirements

This is some serious stuff, and will vary from industry to industry, so it's important to make sure you understand ahead of time what the legal requirements are of operating a business in your sector.

As the list varies so much depending on what your business does and who it serves I'm going to focus on giving you the main things every business needs to be aware of and strongly encourage you to research what other legal requirements there are in your particular sector (or you can give us a call and we'll do all the hard work for you).

Here are the main ones you need to make sure you have covered:

• Insurance - you're likely to need a combination of public liability, professional indemnity, and employers liability (this is a legal requirement if you employ even just one person - in fact, it's the only type of insurance that's legally required, and the Health & Safety Executive has the power to fine you up to £2,500 for every day you go unprotected... ouch!). You might also want to consider Directors' and Officers' Liability Insurance (D&O) which covers you as a director for any claims made against you directly

• Mandatory Qualifications & Industry Specific Accreditations - some professions require that you be qualified to a certain level in order to legally provide services, or that you are registered and accredited with the relevant industry regulators

• Licensing - you may need a specific type of license in order to provide certain products or services

• GDPR (General Data Protection Regulation) - this is a relatively new regulation that was introduced here in the UK in May 2018, and relates to how you collect, store and process data as a business. Every business who collects, stores or processes any type of personal information is required to register with the ICO (Information Commissioners Office) and follow these guidelines

• HMRC Registration, VAT & PAYE - All companies must be registered with HMRC (and Companies House in the case of Limited Companies), and you must register for VAT Services if your turnover exceeds, or will exceed, the VAT threshold (currently at £85,000) in a 12 month period. If you're employing people then you will also need to make sure you register for PAYE services with HMRC and comply with their Real Time Information (RTI) initiative

Give us a call if any of that sounds too daunting or you need help or advice and we'll be happy to help. You can book a free consultation here: Book A FREE Business Advice Session

Information Management Systems

Data and information is the life-blood of any business - who are your clients? How do you record sales and expenses? How effective is your marketing and what are your conversion rates for each marketing channel? What are your stock levels? Where do you store vital information about your employees?

Managing data correctly has become even more important from a regulatory point of view since the introduction of GDPR, and businesses can face extortionate fines if they are found to have mis-managed the information they hold on individuals, including employees and clients alike.

You also need to have an effective way of managing your sales pipeline, your order book, and your company's financial data.

Business management systems is something we specialise in, and in our experience is one of the most common areas business owners need to improve on to help strengthen and grow the business. If this is something you'd like to know more about you can book a free business systems consultation HERE.

So, your business plan needs to include a detailed section on IMS - information management systems.

At the very least you should detail what you are going to use to manage the following:

• Sales Pipeline (examples: HubSpot, ServiceM8, Salesforce)

• Customer Records (examples: Xero, Quickbooks, ActiveCampaign)

• Employee & Payroll Records (examples: Xero, Quickbooks, Sage)

• Tax Reporting to HMRC (examples: Xero, Quickbooks, Sage)

• Turnover, Profit & Loss, and Balance Sheet Values (examples: Xero, Quickbooks, Sage)

• Invoicing & Purchasing (examples: Xero, Quickbooks, Sage)

• Stock Control (examples: Xero, Quickbooks, Sage)

Consider how reliable each system is, and how able it will be to cope with an increase in sales as your business grows - how scaleable are your systems, and when might you need to think about upgrading them?

Include the costs per user for your chosen systems, and how easy it will be to connect each system together for a seamless user experience both on and off site.

Financial Projections & Start-Up Capital Assessment

This is probably the most important part of your business plan for two reasons; it shows whether or not your business will be profitable (and when), and it shows when investors/funders are likely to see a return on their investment, and what level of return to expect.

If this part isn't right, is missing information, or is unrealistic you're at risk of failing to raise investment/funding and you're at risk of your business failing due to poor cashflow and/or trading losses.

It's also the section we find our clients are most uncertain about how to do correctly, and most worried about getting wrong (which is where we come in).

We recommend you create 3 main financial statements:

1. 12-month Cashflow Projection

2. Profit & Loss Accounts for Years 1-3

3. Startup Capital Summary

So let's look at each of these in more detail.

Cashflow Projection

The important thing to remember here is that you are projecting CASH movements in and out of the business, which can be quite different to profit and loss.

Profit and loss is often based on accrual accounting principals, meaning your sales and expenditure are recorded and processed based on the 'tax point' date. This is the date on which the sales or purchase invoice was created - NOT necessarily when you get paid, or make a payment to a supplier.

For example, if you raise a sales invoice on 5th March, but its due date is 5th April, the sale will be recorded as sales revenue on your P&L report in the month of March, but no money will arrive in your account until early April and so would be recorded on your cashflow statement in the month of April.

This is the key difference between cashflow and profit and loss.

Another thing to bear in mind is VAT.

VAT is not your money, and doesn't show on your P&L, but it is cash that is paid into your bank account from your customers nonetheless. So, your profit and loss excludes all VAT payments, but your cashflow includes all VAT payments. It's important to remember this when developing your financial projections and to include your VAT payments to HMRC on your cashflow projection, but remembering to remove all VAT from your figures when you convert them into your profit and loss projection.

It sounds complicated, but we have developed a very easy-to-use financial forecasting spreadsheet that does all this hard work for you automatically - get in touch if you'd like a copy!

To summarise, your cashflow forecast should be a summary of all cash in minus all cash out with a finishing cash balance for each period (we break ours down weekly so our clients know what the cash position of their business is likely to be on a week by week basis).

You also need to include a brief section detailing your 'cashflow assumptions' which explains how you worked out the figures in your projections. You need to show how you've created realistic projections (especially concerning sales revenues and profits) by detailing how you've factored in time to establish your products and services in the marketplace, what resources you believe you'll be able to devote to selling and what volumes and conversion rates you expect.

Provide details on how you've accounted for possible delays and unforeseen problems, and both what credit terms you will allow your customers and what credit terms your suppliers will allow you.

Profit & Loss Accounts

These should be in the standard accounting format, and serve as an annual summary of all sales revenues minus cost of goods sold expenses (to give you a gross profit margin), and then minus administrative expenses (sometimes known as 'Overheads') to leave you with your net profit figure.

The figures on your profit and loss statements should exclude all business taxes, like VAT and Corporation Tax, but will include things like Employers NI contributions as these are classed as a deductible business expense.

Remember that dividends can only be paid out of company profits, and are not tax deductible, so these are not usually shown on P&L reports.

Startup Capital Summary

It's important to know how much capital you are going to need to get your business started.

How much do you need to spend on tools, appliances or machinery?

What will it cost to secure the lease on your new commercial premises?

How much operating cash do you need to buy stock, pay employees, and run the business?

You need to be really clear on how much money you need to raise in order to get things off the ground, as being short of capital in this vital early stage could mean failure for your new venture before it even has a chance. Make sure you list everything out on a detailed spreadsheet and account for all the costs you'll incur within the first 3 months of starting your business.

You'll want to include everything from asset purchases, employee/staff costs, marketing expenses and commercial premises, to business management software subscriptions, insurances and stock.

As well as giving you peace of mind that you're not going to run out of cash, this section is vitally important for investors and lenders as it quantifies why you're asking for the investment or loan, how you've arrived at the figure you're asking for, and how those funds will be allocated.

You'll want to include how much investment or borrowing you've already secured from other sources (including how much you've put into the business yourself), what has been spent to date and what the money has been used for.

Remember, these figures should all be reflected in your cashflow projections.

Contingency Planning

This is the final section of our business plan and it's all about the "what if's".

What happens if your business fails? If there's a major pandemic, or economic downturn? What happens if a new piece of technology makes your product obsolete?

Our 'insurance' against needing a contingency plan is the earlier work we did with the PESTLE and SWOTT assessments - by completing these you should have already had a chance to consider how viable and secure your new business venture, even when faced with major challenges. These tools give you a vital opportunity to adapt your business model NOW before you get sucker punched by life and knocked out for the count.

However, life can be unpredictable and there's no way to foresee every possible challenge that lies ahead. So many businesses were caught off-guard and completely un-prepared for the global pandemic of 2020 resulting from the spread of COVID-19, and the subsequent economic and social lockdowns that ensued.

Yet, it wasn't completely unforeseeable... we just never thought something like that would happen to us and so we got complacent, comfortable, and vulnerable.

In fact it's been a huge wake up call for those of us running businesses, and a reminder of how important contingency planning is in business because it CAN and DID happen to us.

So in this section you need to consider and develop strategies for two possible outcomes; your idea fails and you need to pivot your business into something else, or your business falls flat on it's face and is unable to pivot into something else.

How will you repay your investors, lenders and creditors? How easy would it be for you to go back into employment to generate and income, and what sort of income would that be?

What other services or products could you offer if your primary business model fails?

What would you do to increase profits and decrease costs if your business isn't as profitable as you predicted it would be? What happens if your sales are 30% lower than expected?

You need to consider all of these eventualities and develop 'bulletproof' strategies to deal with them to show your business partners, lenders and investments that you are prepared and have a plan to pay them back should the unthinkable happen. This reduces their risk, and increases the likelihood of securing the funding you need for your new business.

Summary

One of the most frustrating things for me to see is the generic business plans produced from basic templates that often land on my desk. They have a unique way of saying absolutely nothing across 15 pages of text and graphs.

Business plans are complex and detailed, and should be tailored to your specific business, industry and niche... otherwise they're not worth the paper they're written on.

In my experience, clients who have tried to obtain funding using these generic business plans usually fail and face a long strong of questions and requests for additional information from the lenders which they're unable to provide because they just haven't done the research needed to put together a comprehensive plan.

Commissioning a business plan is not cheap when it's done properly by people who understand how to put them together professionally, but it is essential when applying for funding, investment and crowdfunding.