Before you start a business, it’s essential to create a business plan. You don’t need to write a lengthy document filled with detailed analysis. If you’re planning to register a company in the UK as a foreigner or resident, utilizing services like The Hoxton Mix can help. By simply jotting down your ideas on paper, you can organize your thoughts, carefully consider your starting point, and identify potential risks early on. Additionally, if you’re looking for a cheap virtual address UK, understanding what a business plan is and how to create one will significantly benefit your venture.
A solid foundation and a reliable compass
Think of a business plan as an outline, overview, or blueprint for your business. It is a document in which you:
- clarify the vision for your business
- state what you will do and what the purpose of the business will be
- plan the steps you will take to get started and follow through
- find out what development opportunities exist and where the dead ends are
- analyze possible risks and find ways to avoid them
In a well-designed business plan, you will get support for your business and guidance on where to go. While writing it, you may come across a great opportunity, or, conversely, you may find that your idea has no chance of success.
A business plan will also come in handy in a bank or with an investor – a well-written business plan will, among other things, increase your chances of getting a loan.
For business development and long-term sustainability
Even as an experienced entrepreneur, don’t avoid writing and updating your business plan. If you want to move your business, improve it, expand into a new market, or enrich it with a new product or service, start with a business plan. It will also help you solve problems that arise in your business.
A business plan serves not only as a guide to get you started but also as a plan that you follow throughout the life of your business. You can constantly set sub-goals, evaluate their achievement, or check the direction of your business.
What does a business plan contain?
There is no clear form or template for writing a business plan, but certain principles and practices are followed. If you’re creating a business plan for a bank or investor, ask them what they expect from it.
Typically, a business plan consists of the following items:
- introduction with a brief and concise description of the business idea,
- presentation of the entrepreneur, his/her knowledge and experience,
- a presentation of the product or service with a justification of why there will be interest in it,
- a plan to ensure the production or delivery of the product and the price,
- market research with an overview of competition and information about the target customer group,
- an organizational plan with an indication of the business structure and human resources required,
- marketing plan and presentation of the product to customers,
- financial plan with an overview of project launch costs and current budget,
- risk analysis and ways to prevent or respond to them,
- a timeline with important milestones.
TIP: The financial plan is often a separate document. Read what it should contain.
Keep your business plan realistic and relevant
You can summarize your business plan or, on the contrary, prepare a detailed document. Depending on what you expect from it and what you will use it for, keep in mind your own needs and prepare your business plan in such a way that it will facilitate the start and further operation of your open up a company in the UK for non-resident format.
Firstly, make sure that your business plan meets these characteristics:
- structured and clear
- specific, realistic, and objective
- focused and future-oriented
- is constantly updated
How does profit depend on the right pricing?
Pricing is an important task. Draw the competition and decide whether you want to be more attractive with lower prices or not compete on price. Entrepreneurs most often make the following mistakes when starting a business:
- they do not include profit in their price; they only cover costs
- they don’t set an anchor on how much they want to earn monthly/quarterly/annually
- they do not take into account how much time they can devote to the business each month
- they do not take into account sickness and vacations
- they don’t estimate the amount of administration or how long it will take to attract a new client
If you need to calculate the hourly rate, we have prepared a simple guide:
- calculate your monthly expenses (in the beginning, those related to the business, including education, telephone, or Internet, are enough, as your expenses should be covered by your work)
- determine how many hours per month you can devote to working with clients and be able to report on it (don’t forget about weekends)
- think about the future and include insurance premiums and taxes in line with company registration in the UK for non-residents
- divide the monthly expenses by the number of hours you work for clients
- add 15-25% to the hourly rate to cover unpaid activities, such as administration
Increase your bottom line by making a profit so that your side business covers more than just your expenses.
Also, consider your expertise or the benefit your products or services have for the client.
Sign contracts and prepare for overdue reminders
It will cost you a few thousand pounds to have a lawyer draft a high-quality contract, but the investment will pay off. Contracts are made for the wrong time, and sooner or later you will find yourself in a situation where the legal fences of cooperation will pay off.
A signed contract does not guarantee that the client will always pay on the same day. Therefore, prepare texts of overdue reminders. You may feel uncomfortable with such a reminder, but don’t be afraid to speak up – maybe the client just forgot. Don’t forget to include a reminder in the text:
- how much does the client owe you
- the deadline for fulfillment
- the invoice number to which the payment is linked,
- penalties for delay
To sum up
Creating a comprehensive business plan is a key step for any aspiring entrepreneur or experienced business owner looking to guide their business to success. A well-designed business plan not only helps organize your thoughts but also helps you identify potential pitfalls and seize opportunities in time. It also serves as a valuable tool when applying for financial support from banks or investors, increasing the chances of obtaining funding. Effective pricing strategies play a key role in profitability, which requires careful analysis of costs, desired profit margins, and market competitiveness.
