Starting a new company is an exciting but daunting prospect. Small and medium-sized enterprises (SMEs) account for 4.8 million businesses in the UK and employ over 23 million people but research suggests that one in three businesses fails within 3 years of commencing operations, with 20% of those failures occurring in the first year. However, The Financial Times Guide to Business Start Ups reveals that “20% of failed businesses would still be in business after 2.5 years if they had sought advice at the outset”, highlighting the importance of conducting research, planning and consulting experts before launching a new venture.
Understanding the market
A strong business plan is not only attractive to potential investors, it is vital to the company’s success. Once the goods or services to be rendered have been identified, the business plan will require: a mission statement containing brand objectives; financial projections allowing for several contingencies; a breakdown of start-up costs and their funding source(s); marketing strategy; an introduction to the management team; and an executive summary outlining the gap in the market and how the company plans to fill that niche.