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Write a Business Plan for Your Crafts Business

By: Rachel Newcombe - Updated: 1 Dec 2010 | comments*Discuss
 
Crafts Business Business Plan Planning

When you’re first starting to run your own crafts business, there’s a huge amount to do. But despite the fact that you may feel run off your feet already, one important task to set aside some time to complete is writing a business plan.

Writing a business plan serves a practical purpose for you, in that it gets all your ideas down onto paper in a clear form and gives you a baseline for which to build on your forecasts and objectives. However, it’s also vitally crucial to have a business plan in place if you want to apply for any business loans or funding. Any business plan should outline your aims, objectives and forecasts, show that you have thought things through carefully, that you’ve got the ability and skills to take things forward and demonstrate that there’s a market for your products or skills.

A business plan is made up of various key sections, in which each play their own individual role. The length of your plan will vary, dependent in part on whether or not you’re applying for any financing or loans. It’s up to you to put it together, so avoid asking anyone else to do it for you, as you’ll know the main elements of your business idea. However, if it’s something you’ve never done before, it is beneficial to get advice if you need it. Help and advice, for example, is often available from Business Link centres, accountants, financial advisors or other business organisations that help start-up companies.

The Key Elements of a Business Plan

Part 1 -The first part of your business plan should focus on what your business idea is, what the market is, the potential for business, how much money you need (if you need finance), the attraction for lenders and your forecasted profit. This should be one to two pages in length.

Part 2 - Next move on to covering your employment history, highlighting your main achievements, and also focusing on how you plan to manage the new business. This is one of the most important sections, so spend plenty of time putting it together and don’t worry too much about how long it is.

Part 3 - Identify the product or service you plan to sell. Offer a simple, easy-to-understand description, talk about why the product or service is unique, talk about how any products will be developed and briefly outline any existing competition on the market. This should come to about two pages in length.

Part 4 -The next section to focus on is marketing. Explain how you plan to market the craft product or service, who your target audience is, where your business will fit into the existing market and who your main competitors are. In addition, focus on how you will sell your product or service, the benefits of buying from you and how you’ll work out pricing. This will probably work out as about three to four pages in length, but you may need to put facts and figures in an appendix.

Part 5 - The fifth section looks at operational issues. In your plan, you should write where you’re planning to operate from, who your suppliers will be, details of the equipment required and any workshop space you need to produce products.

Part 6 - Section six of your business plan is the financial analysis. This will be about two to three pages and should offer a summary of your business forecasts, a monthly profit and loss forecast for the first two years, a profit forecast for a further three years, a cash flow forecast for two years, details of how you worked out your forecasts, the main risks that could affect your predicted figures and an analysis of your strengths, weaknesses, opportunities and threats.

Part 7 - The final section should look at your prospects. This covers your short and long term goals and objectives, details of any financing you need, what the benefits would be for any investors. This will amount to one or two pages.

Finally

It sounds like a mammoth amount to get through, but it’s an essential part of a start-up. The page lengths of each section will vary depending on your business idea and projected size, but try not to cram in too much information. Finally, don’t forget to present your business plan well, for example in a smart folder, as poor presentation won’t go down well.

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