Skills Series: Business Plans
A business plan is a document that clearly sets out your core business objectives with detailed plans on how you will achieve them. A good business plan should help you and others understand how to create a sustainable business that makes money.
Investing time into planning a business venture allows an entrepreneur to really think about every aspect of their business idea in detail. There are always hidden complications in setting up a business so identifying these before they creep up out of the blue is invaluable!
A business plan will also help you to:
- Obtain funding and loans
- To focus on achieving business goals such as sales target, keeping track of cash flows
- Provide a guideline to grow the business
- A business outline
- Business objectives
- How you plan to achieve your business objectives (including time frame)
- Marketing (including information about the market in which it will operate)
- Sales plans (how the business aims to make money)
- Financial forecasts
Try downloading one of these free business plan templates to start building a professional business plan!
Business Plan Template – Free Download – How to Write a Business Plan
Business plans and templates | Business tools
Here are some other potentially useful resources if your partner organisation is trying to branch out their business or start new ventures!
A Cash Flow Forecast estimates the incoming and outgoing money of a business over a period of time. It should include revenue sources such as sales as well as business expenses like rent, tax and wages and can be prepared on a weekly, monthly or annual basis.
Cash flow forecasts are often required to secure a start-up loan but also provide an opportunity for business owners to double-check if their business plans and expectations are realistic!
There are numerous reasons to prepare a cash flow statement, including:
- Used to budget and forecast business finances (this is essential to be able to run a successful business!) You will need to know how much cash you have and when payments are due.
- To see how much cash you anticipate – if you are constantly seeing negative cash flows you will need to take action to avoid business failure.
- Influences investment or capital decisions.
- Necessary to obtain bank loans and funding from third parties.
The main sections in a cash flow statement are:
- Revenue (This can be obtained from items such as cash register, receipts books/issued, bank statements)
- Expenses (Rent, staff wages, tax, supplier costs, marketing and promotional expenses, Start-Up Loan repayments)
- Net Cash Flow (Total Revenue – Total Expenses)
Want to give it a go? Check out this free and easy template to get started: Cash flow forecast template – free download
Key discussion topics:
- Why do you need a project proposal?
- What are the advantages of a clear project proposal?
- What are the different project proposal types?
- How to Write a Project Proposal
- Acquire “buy-in” from stakeholders, investors and project workers
- Ensure that everyone is working towards the same goals and priorities.
- Allow budget and staff changes along the way – things do go wrong, so it is easier to change a plan once you have an original plan and remain in control during the process!
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It establishes project viability
Clear proposals prove the viability of a project or program.
- Clarifies expectations
Increase clarity regarding requirements and how they will be achieved.
- Creates structure
If the structure and organisation is established at the beginning of the project, then everyone knows who they are responsible to and for.
- Increased budget
Successful proposals can lead to future approved budgets and financial support for organisational growth and project replication from stakeholders and investors involved in the project.
- Business growth
Proposals can help grow the budget of an organisation with the involvement of more stakeholders and investors.
- Expands the brand
The involvement of stakeholders can forge new alliances and increase a brand’s credibility and exposure.
- Ensures future success
If methods and measurement tools are planned in advance, then the project is far more likely to be successful in achieving its aims and objectives.
- Establishes How to Plan for Success
Proposals are useful planning documents and templates for the implementation of future projects.
1. Formally Solicited
A formally solicited project proposal is established in response to an official request for a new proposal.
2. Informally Solicited
An informally solicited proposal has no specific document required to outline customer or audience demands.
3. Unsolicited
Unsolicited project proposals can be compared to a cold call, an “aha” moment or an unexpected but enlightening conversation with a customer or member of staff — no one asked for or expected to receive one, but if the audience can relate to the proposal, it can prove extremely valuable.
4. Continuation
Continuation project proposals are usually an update or reminder for ongoing and already approved projects.
5. Renewal
A renewal project proposal is required when an ongoing project has been terminated or the resources and support behind such project can no longer be used.
6. Supplemental
A supplemental project proposal is required when more resources are required to complete a project than were originally proposed.
Remember! A project proposal is not ...
… a Business Proposal (a document in which legal terms are outlined and signed as a contract). Clients and sponsors sign off the contents of a project proposal but it is not a legally binding contract.
A basic project plan should include the following elements:
- Project aims: what are the overall aims and objectives?
- Project deliverables: what are the specific, tangible aims to achieve the overall aims?
- Project schedules: what specific tasks need to be completed? How much time will they take to complete, who will be responsible for them, what key interdependencies are there between specific tasks and what key deadlines need to be met?
- Resource requirements: what time, equipment, budget and people are needed to deliver project deliverables according to schedule?
- Communication plan: who needs to be kept informed about project progress and how?
- Risk management: identification, monitoring and mitigation of risks?
- Quality guidelines: detailed and measurable guidelines for level of output quality desired according to budget, time and resources available
You could use a Gantt chart to help you:
- Establish the initial project schedule
- Allocate resources
- Monitor and report progress
- Control and communicate the schedule
- Display milestones
- Identify and report problems
Before you start writing, think about the following:
- Define your audience.
- Determine the problem being solved by your proposal.
- Conduct research on the current state of the issue and potential solutions.
- Proactively determine the effect that this project will have on company success.
- Establish a timeline and determine the type and amount of resources required.
- Begin to outline your proposal document.
When you are ready to start writing, you could follow the following structure:
Section 1: Project Information
- Name of the Organization
- Project Title
- Project Summary
- Project Timeframe
- Prepared By
- Attached Documentation
- Project Contacts (any individuals involved in the project)
Section 2: Project Summary
- Why are you doing this project?
- What will you be doing?
- How will you be doing it?
- Who will be doing it?
- Where will it be done?
- How long will it take?
- How much will it cost?
- Project Background: what is the current state of the problem you are trying to solve? Why should your target audience care about solving it? Try to keep this to 1 page.
- What are the aims and objectives of the project?
Section 3: Project Methodology
The project methodology section of a proposal is where you detail the plan for how the objectives mentioned in the previous section will be achieved. This is the first section of the proposal that details the course of action to remedy the problem and is meant to prove that adequate research has been done for this decision. To start, outline the methodology being used, the population being addressed, and establish the process for reaching your objectives.
This section is typically broken into three parts:
- The Project Approach Summary: Who will be team delivering the project? What tools will be used? How will changes be addressed during the implementation of the project?
- Project schedule: What tasks need completing? How long will they take to complete? Who will complete each task? What resources will be needed for each task? What key deadlines need to be met? Use a Gantt chart to help you map this out.
- Project Deliverables: what tangible results need to be achieved? (e.g. product, information)
Section 4: Project Risk Management
- Risk Management Plan: how will risks be minimised during the project?
- Risk Register: What potential risks are there? How will they be mitigated?
Section 5: Project Costs
- Project Budget: the budget breakdown in different categories.
- Budget Narrative: budget breakdown if anything needs clarification.
- Additional Financial Statements: e.g. profit and loss statement, a tax return, or funding sources, if necessary.
Section 6: Conclusion
Review of most important points in the proposal.
Section 7: Appendix
Additional charts, graphs, images, or reports cited in the proposal.
Overall, a good project proposal should allow you to do any of the following:
- Define the reason why a project is necessary
- Detail project requirements, specifying the quality of the deliverables, estimating resources and timescales
- Prepare a business case to justify the investment
- Secure corporate agreement and funding
- Develop and implement a management plan for the project
- Lead and motivate the project delivery team
- Manage the risks, issues and changes on the project
- Monitor progress against plan
- Manage the project budget
- Maintain communications with stakeholders and the project organisation
Watch this recording of our live webinar to hear Simon Darker, co-founder of Think Pacific, talk about Think Pacific’s ‘business’ journey with a special emphasis on the steps involved in setting up a sustainable social enterprise!
This might be particularly interesting to those of you interesting in setting up your own business or social enterprise as Simon talks through his experience of setting up TP.
Key discussion points:
- Why Fiji?
- What sparked the idea of starting TP?
- The process of turning the idea of TP into a reality
- How did you approach getting funding?
- What tips would you give to interns working with our partners in Fiji to help them create a sustainable business model/funding strategy?
- What are your goals/ plans for TP in the future?