How I wrote my business plan: Raise Bakery
Jeremy Jacobs is the MD of Raise Bakery, a family-run business in Sussex creating mouthwatering cakes that take classic British influences and give them an American twist. He's also a Virgin StartUp mentor, helping our businesses achieve their potential and navigate the waters of starting up. Here he talks to us about the importance of creating a business plan.
When we started our family business back in 2009 we had no idea it would grow to the size it has today, and because it grew up around us we never wrote a business plan. But if someone transported me back to 2009, I would have made sure we had a robust business plan in place. We now write a business plan for any significant venture. We opened our first retail store into June 2015, and through careful planning we were able to go from getting the keys to opening in 4 weeks, several thousand pounds under budget.
Why write a business plan?
Here are a few reasons why I believe it important you have a business plan in place before you spend any of your money.
Gets you funded
If you are looking for outside investment you will need a business plan. Very few people will hand over any cash without being sure you know what you are doing. It gives you credibility and shows you have thought your idea through; it will also give any investor confidence that you are the right person for their investment.
Gives you direction
Writing your business plan will help you to answer some key questions that need answering. What your unique selling point is, product offering and how you will get your first customers are some examples. If you go into your new venture without a clear idea you will quickly find things turning into chaos.
Gives you confidence
One of the biggest reasons more people do not start their own business is lack of confidence, either in themselves or their idea. Part of the business planning process is to validate your idea. When you are done writing your plan you should be raring to go!
Focuses your team
If you are employing people, they need a clear idea of your vision for your business. You don’t have to share all the nitty gritty and financial information but you will want to share a summary to ensure you have the right people onboard, and that they are with you on your journey.
Makes sure you don’t run out of money
You really don’t want to go into any business without a good grasp of what you need in terms of money. It doesn’t have to be big or complex but get some numbers down on paper (or a spreadsheet).
Measures your success
Success is different to everyone. Make sure you are realistic about what you want to get from your business. It might be a lifestyle business giving you enough money to enjoy a comfortable life or you might want to own multiple businesses jetting around the world in upper class. There is no wrong answer, but be honest with yourself and plan for that.
How I wrote my business plan
Having run my own business for quite some time I believe I have lots of experience in starting up and running a business. Luckily for you I have condensed that experience in business planning into a few handy tips. But first and foremost - believe in yourself and your idea, be open to feedback, and keep it simple.
Get under the skin of your industry; find out what your competition is up to and what is missing. You can get a lot of useful information in clever ways. We sat in coffee shops and counted the number of people served in an hour across different times of the week. Get an idea of that and the average spend per customer, and you are half way there to working out how much income you expect to receive.
Get to know your local business networking groups and local chamber of commerce and be bold and ask people for their advice. Speak to professionals such as accountants and solicitors who will often give you at least an hour of free advice in return for the hope you will use them. Use these resources. Charm goes a long way to getting free advice from people.
Be pessimistic (ish)
My best piece of advice is plan for the worst and hope for the best. You don’t want to find yourself running out of cash half way through the project. Make sure you plan in a contingency budget. That said don’t go nuts and ask for four times what you need, as people may not take your seriously. It’s not often things will turn our exactly as planned - much better to under-promise and over-deliver.
Stick to the plan...
Watch your plan like a hawk, track every penny you spend, review regularly and make amendments. If you find yourself running out of money then be prepared to cut spend out of the plan. I always separate my financial plan into “essentials” and “nice to have”, and then you know what you can cut out quickly and what must stay.
...But be flexible
Things may change and you will have to move quickly. When we first opened our doors to our first retail store we soon realized that people expected different things, and we had to change our product offering quickly to suit our customers’ expectations.
Don’t rely on friends and family as your market research. Ask strangers, as they will not care about offending you, and you’ll get a more honest and realistic answer.
Keep it simple
Quantity does not equal quality. Keep your business simple and easy to understand. Lots of different people will need to read it and some will have never dealt with your industry so you need to explain everything in plan English.
Do spend time on your business plan, no doubt you are keen to get on and start your new business but take my advice the more time you spend on your business plan the less time you will stress and worry when you do start. It will make the experience so much more enjoyable, which it should be!