the princes trust business plan

Small Business UK

Advice and Ideas for UK Small Businesses and SMEs

How to get funding for your business with The Prince’s Trust

The Prince's Trust could give you with a useful mix of funding and mentoring as well as getting to grips with cashflow forecasting.

If you’ve got a great business idea but are finding out the hard way that it can be a royal pain to get funding, The Prince’s Trust could be the answer.

The Trust’s enterprise programme has been running for four decades and is open to 18 to 30-year-olds who are unemployed or working fewer than 16 hours a week. In addition to business training schemes which tackles topics like marketing, planning and tax, the programme provides funding of up to £7,500 (through the government-funded Start-Up Loan Company ) along with support for your business idea. You can pay the loan back within one-five years and can make extra early payments with no early repayment charges.

Prince’s Trust programmes start with a free information session where they can tell you how your venture can be supported. You’ll then attend a two to four-day workshop where you’ll receive mentorship and resources before the chance to apply for a loan.

A year to work through business idea

Sophie Beesley, head of the Business Programme says, ‘We’re very flexible about the time it takes to develop a viable business idea. There’s basically a window of 12 months to work the idea through (before you can secure funding). Although, if someone came to us with, for example, a lot of plumbing experience and wanted to set up their own plumbing company, they could get a loan in as little as three to four weeks.’

Loans and funding available

Simon Prynn used a £1,000 loan from The Prince’s Trust to set up his own drum classes and says the funding and support he received changed his life. ‘I was so sick of having jobs I didn’t like and going back to college wasn’t for me. This was something I knew I could succeed in doing,’ he says.

‘I think the key thing the Trust is looking for is commitment and passion to go that extra mile. My advice to anyone with a business idea is: go for it! Everyone told me I couldn’t do it, even my mum and dad, but The Prince’s Trust helped to prove them wrong. Before I was just drifting, now I have purpose and direction.’

The Printed Bag Shop

Craig Smith and his partner Lisa Kennedy received a £3,000 loan from the Trust to start their business, The Printed Bag Shop , after they were made redundant. The company has since gone on to win several awards.

Smith says, ‘It’s hard work being self-employed because you can feel quite lonely, but they’ve really helped. We have since got further loans, but we wouldn’t have been in a position to get them without the help the Trust initially provided.’

“The business has supplied the likes of The Royal Bank of Scotland and Coca-Cola, and managed to hit £1 million in revenue this year for the first time”

‘We are over the moon with the success of the company, mostly because it means we are providing a better future for our daughter, Ellie. Not only in terms of money, but I also hope we can encourage her to have a “can do” attitude throughout life,’ adds Smith.

The typical amount of funding businesses usually receive from the Trust is £2,500. Interest on the loan is six per cent and the repayment scheme requires that you only pay £20 for the first six months with the remainder spread out over a period of two to five years.

‘Because it’s such a comprehensive programme we need around £1 million a month and are always looking for donations,’ adds Beesley.

Small Business is working in partnership with a panel of lenders to help you find the best finance deals.

If you’re looking for fast funding for your business, complete this quick application to access our panel of business lenders.

More on early-stage funding

150 UK small business grants to apply for right now – UPDATED – In need of some funding for your small business? These grants should give you a boost, wherever you’re based in the UK

Dom Walbanke

Dom Walbanke is a feature writer for Growth Business and Small Business, focused on matters concerning start-ups and scale-ups. He has also been published in the Independent, FourFourTwo magazine and various... More by Dom Walbanke

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Business PLAN 2015

Business enterprise (bus2011), newcastle university.

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The prince’s trust, business plan pack.

The Prince’s Trust Enterprise programme

The Prince’s Trust has helped many young people to complete their business plans and start their own businesses. If you are aged 18–30 and unemployed or working fewer than 16 hours per week, then we might be able to help you. We have offices throughout the UK and in each there is a team of Enterprise programme staff.

We can’t guarantee that your business will work or that we will be able to offer you money, but if you are up for a challenge and want our help to explore your business idea, get in touch and come and meet us.

To take part, you need to be interested in self employment and have a business idea that you would like help to test and explore. The programme can then help you to see if your business idea will work and whether self employment is right for you. If through this process you find out it is, the programme can offer mentoring support and, if you really need it, financial support to start your business. However, if self employment turns out not to be the right option, the programme can offer support to secure other goals in employment, education, training or voluntary work.

You’ve got a business idea. You’ve decided to start a business.

You want to get going., but there’s a lot more to a good business than a good idea. you, need to think things through to maximise your chances of success., are you the right person to run the business will customers like, your product, a business plan will help you turn an idea into a business. it needs, you to think through all the parts of your business, to plan how, everything will work. it will take a few weeks to write if you’re going, to do it properly. some parts will be easier to complete than others., stick at it because it’s not the final document that’s important, it’s, the process. although you want to have a good plan when you’re, done, an ok plan is better than no plan., the quick pitch.

Purpose of this section

This is the most important part of your business plan because if someone is busy, this might be the only section they read.

It should explain the basics of your business. After reading it, the reader should understand what the business is about and be keen to know more. It should include the key points of your business plan and should be short – no longer than two pages.

Because it is a summary of your business plan, you should write it last.

How to complete this section

Do not complete this section until you have finished the rest of your plan.

Please follow the steps outlined in the illustration below.

EXECUTIVE SUMMARY

SECTION ONE

1 Business summary Explain your business idea – what you are going to sell, where and to whom. Explain your business name and why you chose it. Describe what type of business you have chosen to be – sole trader, limited company etc. Explain why you have chosen that structure.

1 Business aims List three to five goals that you want to achieve through your business. For example, you might want to earn enough money to support your family or get your goods stocked in a particular store. You should divide your objectives into short- term (one year), mid-term (three years) and long- term (five+ years).

1 Financial summary Describe your financial goals for your first year – the turnover you hope to make and the amount of cash you hope to have left in the business at end of your first year of trading (these should be the amounts you worked out in your cashflow). State what money you need to start your business. Explain where you will get the money from (for example, the bank, The Prince’s Trust, family) and whether you are contributing any money yourself. If you are not, explain why not.

DESPITE EVERYTHING

I’ve been through i, was thrilled to be, able to set up my.

• KELLY MCDERMOT

SECTION TWO

ALL ABOUT YOU

This section is to explain why you want to start your own business and why you think you (and, if applicable, your business partners) have the experience, ability and commitment to make your idea a success. It should also give details of your education and qualifications, work experience, training and hobbies. Practical experience is especially important.

OWNER’S BACKGROUND

2 Why you want to run your own business Why have you decided to start your own business? Why is it the right choice for you and why are you determined to make it a success? Why do you think you have the skills, knowledge and experience to make it work?

2 Previous work experience Describe any experience you have in the activity of your business or in running another business. For example, if you have worked in the field or if you have helped your family to run a business.

2 Qualifications and education Explain any qualifications you have which you think will help you to run your business.

2 Training Describe any training courses you have been on which will help you to run your business. These might be business skills courses or courses to develop industry skills, for example, in carpentry or hairdressing. Give details of any training you plan to do in the future.

2 Hobbies and interests Explain any activities you do in your spare time which will help you to make your business a success.

You should attach a CV for each person involved in the business and include copies of any certificates.

WHO ARE YOUR

This section is to describe the customers that might buy your product/service. You need to understand these customers so you can work out how to tell them about your business.

Be specific and find out detailed information about your target market - local customers who will be interested in your business, not general information about all the customers in the world who are interested in businesses like yours.

The best proof that customers will be interested in your business is if you have already sold some of your products/ services. The next best thing is to have customers waiting to buy from you.

SECTION FOUR

4 Explain whether your customers are businesses or individuals

Your customers might be both individuals and businesses.

4 Describe your typical customer

For example, if they are individuals, broadly how old they are and how much they earn. If they are businesses, what sector they are in and what size of business they are.

4 Describe where your typical customers are based

For example, are they in the UK, in a particular region or worldwide.

4 Explain what prompts your customers to buy your product/service

For example, when they have a leaky tap or when they receive a big salary bonus.

4 Describe factors that help your customers choose which business to buy from

For example, which business has the most experience, which business is nearest to them or which product they think is in fashion.

4 Explain whether you have sold any products/ services already

Describe how many sales and how much money you made. If you can, provide a list of customer/ sales details.

4 Explain how many customers you have waiting to buy from you

Ask potential customers to write a ‘letter of intent’, stating that they would like to buy your product/service and include copies in your business plan.

DO YOU KNOW WHAT

It’s like out there.

In section four, you described your potential customers. Most of these customers will already be using other businesses. This section is to research those businesses and customers.

Lots of businesses look good on paper but the only test that matters is whether the product/service sells. You can’t be sure that your assumptions about your business are right unless you do some proper research (i. don’t just ask your friends and family if they think it’s a good idea).

There is no right amount of research. It is better to research your local market, in the area you are going to run your business, than it is to research the entire global market. The right amount of research will tell you what your market looks like, how it behaves and what customers expect.

There are two types of market research outlined in the illustration below: >

> Desk research > Field research

Write up your findings including the most important information only.

MARKET RESEARCH

SECTION FIVE

5 Desk research uses information from the internet and books. It involves learning what other people say about your market and finding out basic facts. When writing a description of your market, you should explain: > how big the market is (for example,

how many sales take place in a year?) > trends in your market (for example, are

sales going up or down? Are people changing how they buy the product/ service?)

> any important facts, statistics or events > whether the market is seasonal or dependent on other external factors (for example, the weather)

Good places to find information are: > general area statistics:

• businesslink.gov > government agencies:
• statistics.gov > libraries: sector magazines and

directories, Yellow Pages, etc. > your own knowledge from previous jobs or experience working in the field

5 Test trading lets you practise running your business. The aim is to see if customers will buy your product and at what price. It doesn’t have to cost lots to do. If you complete test trading, you should explain:

> where you did it and how much it cost > how many products you tried to sell and at what price > how many products you did sell and at what price > the key things you learnt > the key things you will change

5 Field research involves asking potential customers their opinion of your business. It is the best way of working out if it will be successful. You should ask potential customers to complete questionnaires. If you are selling a product, you should also carry out test trading to see whether people will buy your product.

Questionnaires When designing questionnaires: > keep it short – one page with about 10 questions > ask questions answered “yes/no” or with options, such as “very happy, happy, unhappy, very unhappy” > ask specific questions – will people buy from your business, at your prices, in your location > ask if people buy from a similar business already and if so, which? Would they change to buy from you and if so, why? > ask if you can keep customers’ details and contact them when you start trading

Include a copy of the questionnaire in your business plan.

In the main body of the business plan: > explain how you chose the people who completed the questionnaire and how many people completed it > describe the main results. For example how many said they would buy your product/service? How many would be new customers? How many customers would you be taking off your competitors?

HOW WILL YOU CONTACT

Your customers.

You need to contact potential customers to tell them about your business. Marketing describes any activity that attempts to make contact with potential customers.

Good marketing materials – in whatever form – will grab a customer’s attention, capture their interest, illicit their desire for your product/service and direct them to take action and find out more.

If your marketing is successful, your potential customers will learn what your business does and where to find you. Popular marketing methods are outlined below.

Different marketing methods are outlined below. Decide which methods are best for your business; choose about three and list the required detail for each.

You must include all costs in your cashflow forecast in section 10.

Word of mouth When customers hear about your business through others, that’s word of mouth marketing. If customers like your business they will often recommend it all on their own. However, it is worth considering how you could encourage them to tell people, for example, by offering an incentive like a discount, or by giving exceptional customer service.

Advertising There are many ways to advertise your business, for example, in a local paper, on the internet or in a directory like the Yellow Pages. You should explain:

> which methods you have chosen,

why and how much it will cost > the type of advert you will use, for

example, size or colours > how many adverts you will use and

how long each will run for

Business literature – leaflets and business cards These should detail only the most important information about your business. You should keep the design and wording simple. If you have already produced some, you should attach them to your business plan; otherwise you should describe the design or include a sketch. You should also explain:

> what materials you will produce, what

information will be on them and who will design them > how many you will produce, who will print

them and how much it will cost

> if you are going to distribute materials to customers, explain how and where

Direct marketing Direct marketing involves contacting potential customers to directly sell your product/service to them. It can be done on the phone, in a letter, email or face-to- face. You should explain:

> which method of contact you will use, why and how much it will cost > how you will find names and contact details of potential customers

Social media Different social media can be a very effective way of marketing your business. It’s free, allows you to put a face on your business and invites a vast network to interact with your activities. As well as the widely used Facebook and Twitter, there are now social networking sites for small businesses which can help you to focus your efforts. If you’re planning on using social media to market your business, you should consider:

> what you want to achieve from social networking and how you will engage with your customers, for example, will you create a blog to give customers the inside view on your business or get customers to offer feedback on product design? > which networking sites are preferred by your target market and for what purpose > how your business activity on social networking sites is kept separate from your personal activity

> how your social networking ties in with your website or other promotional materials and events

Tradeshows and exhibitions Some businesses can access large audiences at a tradeshow or exhibition. However, exhibiting is expensive and time consuming, so you need to be sure it will be worth the effort. If you plan to attend events, you should explain:

> which events you are planning to attend, when and how much it will cost > why it is important to attend these events at this stage in your business

Website Websites don’t have to be complicated - just three or four pages to show what you do and how to contact you. If you already have a website you should give the address. If you don’t have one but plan to, you should explain:

> the design and any special functionality you want to include, for example, an online shop > who is going to design it for you and how much it will cost to build and maintain

You can refer to The Prince’s Trust in your marketing materials using the words ‘Initially supported by The Prince’s Trust Enterprise programme. You cannot use The Prince’s Trust logo.

MARKETING STRATEGY

SECTION SIX

COMPETITORS AND

How do you compare.

A competitor is any business that offers a product/service that is similar to yours. Businesses often have many competitors. It’s best to focus on those which customers are most likely to buy from instead of you; probably those nearest to you, with the most similar prices or the most similar products/services.

You need to think hard about your business and how you compare to your competitors. You should put your thoughts in a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.

A SWOT analysis will help you to understand all the things, good and bad, that could affect your business. If you know what these are, you can work out how to resolve them or use them to your advantage. Thinking about your weaknesses and what could go wrong is important because it will allow you to correct your mistakes before they happen.

COMPETITOR ANALYSIS

SECTION SEVEN

7 Table of competitors Find out information about your competitors. Try to do this for at least five competitiors.

You need to work out: > who they are > where they are > what they sell > how much it costs > how big the company is > what their main strengths

and weaknesses are

7 SWOT analysis Each part of a SWOT analysis is explained below. Try to think of three points for each category. Make sure each point is specific to your business.

Strengths > Positive things about your business that will make it stand out against competitors. These might be specific to your product/ service or more general, such as your location

Weaknesses > All the things that could mean you struggle to make your business work. For example, areas that might be affected by your lack of experience or by lack of money > For each weakness, explain what you are going to do to address it, for example, more training

Opportunities > External factors that you and your competitors can take advantage of, for example, changes in the law or market trends

Threats > External factors that could affect how well your business and your competitors do. For example, a large shopping mall opening up that might take away your customers > Explain how you will prepare for these and how you will reduce their effect on your business

7 Unique Selling Point (USP) Your USP is the thing that makes your business different from your competitors. It might be specific to your product/ service or it might relate to the way you run your business. It would be the reason that customers stopped using a different business and became your customer. Be specific and avoid clichés, such as, better quality products, better customer service or cheaper products. Consider how you will show your customers that you are the better choice.

If you can’t think of a USP you need to review and improve your business idea so that there is something that makes you different or better than your competitors.

WILL IT COST?

Before you decide how much to sell your products/services for, you need to work out how much each one costs you to make and deliver. This will stop you selling things for less than they cost.

The price you charge customers for a product/service must be higher than its cost and include enough money to cover the extra costs of running your business (for example, petrol, bills, rent etc.) and your essential personal costs taken from your personal survival budget. The difference between an item’s cost and its price is its profit margin.

To work out your costs, use the table provided. Each of the rows are explained below.

• If you are completing this form in MS Excel, these sections will calculate automatically.

COSTS AND PRICING STRATEGY

SECTION NINE

Once you have worked out the price for each of your products/services, compare it to your competitors. If your price is more expensive, you need to think whether customers will pay extra to buy from you.

If you can’t work out the price of a single product/service, you can work out the price of a batch. For example, for food this might be on portions of four or for T-shirts, a batch of 10.

Break down your product/ service into parts (for example, different materials, packaging, labels, etc.) and put each one in a separate box. Work out the cost of each and write it down in the relevant box.

Work out the total cost of the different parts of your product/ service (add up all costs in B).*

If you worked out the cost of a batch, i. for more than one product/service, to work out the cost of an individual unit, divide the total cost (cost C) by the number of products/ services in your batch (cost A).*

Work out a price that will cover the business overhead costs and give reasonable profit. Compare this price with your competitors to see where you stand. This (cost E) is the price you will charge your customers.

Work out the difference between your unit cost (cost D) and your price per unit (cost E). This difference is your profit margin (£).

Work out the profit margin as a percentage (%) by dividing your profit margin (cost F) by your unit price (cost E) and multiplying by 100.

Work out the mark up by dividing your profit margin (cost F) by your unit cost (cost D) and multiplying by 100.

HOW MUCH MONEY

Will you make.

A sales forecast shows how many sales you are aiming to achieve in your first year and how much money that would mean you receive. It’s hard to know what a realistic number of sales might be so it’s better to plan for the worst case.

For lots of businesses, the number of sales made is affected by external factors such as, holidays, seasons, weather, etc. Think whether you expect your sales to be different in some months and show this in your sales predictions.

A cost forecast shows how much money you will spend on products/services if you achieve the number of sales in your sales forecast.

Complete the sales/costs forecast table provided, following the instructions shown below.

FINANCIAL FORECASTS: 10 SALES AND COSTS FORECAST

Sales calculations A in the names of the months. Month one should be the month in which you plan to start trading.

B down how many sales you plan to make in each month. To do this, work out how many products/services you think you can sell in a day. Multiply that number by the number of days in a week you plan to trade. Lastly, multiply that number by 4 (average number of weeks in a month) to give you the number of sales you plan to make in a month.

C out how much money you will make each month. To do this, take the number of sales (B) and multiply it by its price (cost F in the cost/price table in section nine). The total income you receive from sales in a year is called your turnover.*

Costs calculations D out how much money you will spend each month if you make your predicted sales. To do this, take the number of sales (B) and multiply it by its cost (cost D in the cost/price table in section nine).*

Assumptions E. Describe any assumptions you made, for example, external factors affecting number of sales. For example, if you were selling umbrellas you would expect higher sales in winter because it rains more.

SECTION TEN

A cashflow shows how much money is expected to come in and out of your business. It brings together all the work you have done in your plan. You must complete the forecast realistically. Make sure you:

> include seasonal changes in overhead

costs such as increased heating and lighting bills in winter > allow for delays between when you make

a sale and when you receive payment > do not over estimate how much stock you

will need > split costs that can be paid on a monthly

or quarterly basis

Once you start your business you will have to keep a record of your actual income and expenditure and you should compare this to your plan to give you an idea of how well your business is doing.

Complete the cashflow forecast table provided, following the instructions below.

10 CASHFLOW FORECAST

A columns show the months in your first year of trading. Write in the names of the months. They should be the same as in your sales/costs forecast in section 10.*

B top rows show money coming into your business and when. You should list each type of income on a different line. Typical types of income you should include are: > income from sales (should be the same

as in your sales/costs forecast in section 10)* > loan funding > any of your own money that you are

putting into the business

C each month add up the total amount of money you have coming into your business.*

D middle rows show money going out of your business. List each cost on a different line. Include all the costs you have worked out in earlier sections of your business plan, for example, marketing costs, equipment costs, personal survival budget. Other costs to include are: > tools > materials/stock > rent/rates > heat/light/water > phone > postage > printing and stationery

> insurance and tax > motor repairs/maintenance > petrol/diesel/other travel costs > IT costs > loan repayments

You should explain what each cost relates to in your costs table in section 10 of your business plan.

E. For each month add up the total amount of money you have going out of your business.*

F. The bottom rows show how much money is in your business at the beginning and end of each month.

a) Balance – take the money earned in that month (C) and subtract the money spent (E).*

b) Opening balance – should be the same as the closing balance of the previous month.*

c) Closing balance – the month’s opening balance (b) plus the current month’s balance (a).*

Breakeven Your breakeven point is the number of sales you need to make to cover the costs of running your business. To calculate your breakeven:

G out the annual cost of running your business (The total column in row E of your cashflow).

H cost G by your gross profit margin percentage (row G in the cost/price table in section nine).

J. To work out how many sales you need to make in a week, divide H by the number of weeks in a year you expect to work.

K work out how many sales you need to make in a day, divide J by the number of days in a week you expect to work.

The costs table explains what is included in each cost in your cashflow. It also explains what assumptions you have used to work the cost out.

For example, you might have a cost line for travel to pay for the petrol you need. In the costs table you would explain how much petrol you have assumed you will use (for example, how many tanks) and how much you have assumed that will cost (for example, how much one tank costs).

If you have explained your costs in your cashflow in a different section of your business plan, you should write in the costs table where the detailed breakdown of the costs can be found. For example, your marketing costs will be explained in section five.

For all other costs in your cashflow you should explain what they include and how you have worked them out.

10 COSTS TABLE

• Multiple Choice

Module : Business Enterprise (BUS2011)

University : newcastle university.

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