The Business Plan

A business plan is a written document that formalises your ideas and objectives for the business. It covers the management, marketing and financial aspects of the business. It also sets out your objectives, and how you intend to achieve them, and these are backed up by profit and cash-flow forecasts.

Why Do You Need A Business Plan?

There are several good reasons why you should take the time to prepare a business plan for your pub.

• The process of putting together a business plan means you must undertake research and consider all aspects of the business. This results in you gaining a greater understanding of the business.
• A well-prepared business plan is essential for raising some types of finance. A good business plan will give lenders confidence in you and your business.
• Breweries and pub companies may require a business plan as part of your application for a tenancy or new lease. An impressive business plan will give you an edge over other applicants.
• A business plan keeps you on track when you are operating the pub. It will enable you to plot your progress and can be a great motivator.

Who Should Write The Business Plan?

You can employ accountants and other business advisers to write a business plan for you. There can be advantages to this. They may have expertise in preparing business plans and it saves you time to do other things. It may also give the business plan added kudos in the eyes of some lenders if it has been prepared by an ‘expert’.

Not with standing the above, there is no reason why you cannot prepare an excellent business plan yourself. The benefits of preparing your own business plan are a greater understanding of the business, added confidence and being able to justify your plan as being your own. When it comes to operating your business, you will be better prepared and have a greater belief in your business plan.

Doing your own business plan does not mean that you cannot seek professional assistance for some parts of it. An example of this is the financial forecasting, where it is wise to have an accountant prepare profit and cash-flow forecasts for you.

Whatever you decide about who should write your business plan, the most important thing is that you have one!

Research And Preparation

A good business plan is well researched, ensuring that the information it contains is based on fact, not guesswork. The SWOT analysis, discussed in Chapter 3, Finding the Right Pub, is essential research that should be included in your business plan. Early SWOT analyses can be made more thorough with further research, building up as you gain more knowledge about the pub and its environment.

Your own skills and experience are important and should be included in your business plan. This helps to identify key strengths and how roles will be organised to run the business effectively. Look again at Chapter 1, All About You, to help you with this.

What Is Included In The Business Plan?

A suggested format for your business plan is as follows:

• summary;
• the pub;
• the environment;
• your plans to develop the business;
• marketing;
• management of the business;
• financial forecasts.

 

Each section is discussed below.

Summary

A well-written summary ignites the reader’s interest. It should be logical, factual and summarise the key factors about your business. It may also present requirements for any additional finance that may be necessary. The summary will include succinct details of the following:

 

• The pub: type of operation, whether tenancy, lease or freehold; description of facilities; clientele; key strengths of the pub.
• The environment: location; summary of catchment area; analysis of the market; trends; environmental opportunities.
• Your plans to develop the business: how you will increase sales; improve profit margins; cut costs or introduce new income streams, such as food or accommodation etc.
• Marketing: who your target customers are; how you will promote the business, such as advertising, word of mouth, public relations etc.
• Management of the business: your own skills and experience; qualifications; staff and how you will organise roles.
• Financial forecasts: ingoing costs; breakeven; profit forecast; how you will fund the business and whether you require any additional funds to cover the cost of ingoing, or any development plans.

 

These sections are covered in more detail in the body of the business plan, with at least a page of information on each. Additional pages will be required for your 12-month profit and cash-flow forecasts.