LONDON, United Kingdom — In Part Two of BoF’s Fashion Business Basics, Imran Amed explains the importance of a business plan and how to approach writing one.
KEY LEARNINGS: A business plan is an essential tool, not just for raising investment, but also for clarifying your goals and objectives, and communicating these to your wider team of employees, business partners and clients. There are five essential components:
Executive Summary: The executive summary is at the beginning of your business plan, but should be the last thing you write. It encapsulates all the key points, ideas and objectives of your business in a very short and concise “elevator pitch.”
Vision & Objectives: This section will help investors, and anyone else reading your business plan, understand what particular market need you are going after and what you will offer that is unique and differentiated.
Market & Competitive Landscape: This section describes the market that you plan to operate in. How big is the market? How fast is it growing and what evidence do you have that this part of the market is a viable opportunity? You also need to identify who the competitors in the market are, whether they are growing and what their position is in the market. What are you going to do that is different?
Implementation Plan: This is probably the most detailed section of your business plan, identifying the specific actions that your business will take to go after the market opportunity you have identified. Ideally, it should cover three years of activity, on a seasonal basis, and should include everything from how you communicate as a business and the staff you will hire, to the space you will need and the outside expertise you will require, in terms of marketing, communications or PR.
Financials: Your financial plan shows how your business will grow in terms of both profit and revenue and what financing you will need to make it happen. An income statement uses projections of how your business will grow at the top line, through sales and other revenues, and will also project the costs of delivering that growth. The cash flow statement shows the peaks and troughs of your cash situation on a monthly basis and identifies what funding you will need to finance growth.
