Producing an Initial Plan for a Business Idea

Crafting a Business Idea

A clear and concise business idea is the starting point of your plan. It should include what your business will do and the unique value it will offer.
Consider the trends in the market, potential gaps, and general consumer interests or needs which could be met by your business idea.
It’s also useful to consider your own interests and skills, as entrepreneurship typically requires a significant time and energy commitment.

Your business structure, whether it’s a sole trader, partnership or limited company, has important implications for liability, taxation and control.
If you’re planning on trading on your own, you might opt to be a sole trader. If you’re planning on going into business with someone else, a partnership might be more appropriate.
Otherwise, you might decide to become a limited company, which involves more administration but provides more protection for personal assets.

Gather information on the market, such as its size, trends and your potential competition, through market research.
Use primary research methods like surveys and interviews to gather data directly from potential customers.
Secondary research methods involve analysing data that has already been gathered, such as market reports or statistics.
Online tools such as social media and Google Trends can also provide valuable data.

Evaluate the profit potential by considering the cost of production, potential pricing and the size of your target market.
You also need to figure out your breakeven point - the point at which your income from sales starts to exceed your costs.
Investigating potential sources of funding can also give you an indication of how viable your business idea is.

Identify potential risks and challenges that you might face, and think about strategies you can use to mitigate them.
A SWOT analysis can help you understand your Strengths, Weaknesses, Opportunities and Threats.
Consider Political, Economic, Socio-cultural, Technological, Legal, and Environmental factors (PESTLE analysis) to gain a rounded picture of the external forces that could impact your business.

Think about how you’ll attract customers to your business, and the strategies you’ll use to keep them happy. This is your customer relations plan.
Your marketing plan should outline how you’ll get the message about your business out to potential customers, for example through social media, traditional advertising or word-of-mouth.
Making sure you have a unique selling proposition (USP) can make your business stand out in the market.

It is crucial to understand the legal and regulatory requirements related to your business.
Check the need for licences, obey employment law, fulfill all regulatory requirements for health and safety, and ensure compliance with tax laws.
Seek legal advice if necessary to prevent issues later on.

Consider your production process, including sourcing materials, the equipment you’ll need and whether you’ll do the work personally or hire staff.
Think about your distribution methods. Will you sell directly to customers, through retailers, online, or through a combination of methods?
Organise your workplace setup. Will you work from home, rent spaces or purchase property.
Prepare for your daily business activities and make sure you have a plan to keep track of income and expenditure for good financial management.