Writing a business plan

The section that will indicate whether the business is viable is the one that sets out pricing and projected sales. How much do you intend to sell your product or service for and, at that figure, what level of demand will there be and will the business be able to meet that volume of sales. If the price was lower, and undercut rivals, would there be more interest?

Premises are another substantial overhead that must be accounted for, even if you intend to work from home at first. Will you buy or rent an office or a factory and what impact will the decision have on the firm's start-up and day-to-day running costs? Other property costs such as lighting, electricity and the uniform business rate should also be set out in the plan. On the credit side, list any premises grants that could be available from either the local council or regional charities.

At the same time, consider what equipment and supplies the firm will require to run and then divide the list into what is essential and what would simply make spending time at work more pleasant. A state-of-the-art computer system might look very impressive, but will it really add to the bottom line? Think about whether it is important for clients to be able to contact you quickly via e-mail or mobile phone, for example, or whether an electronic stock-taking system would make ordering and distribution more efficient. If the venture is a manufacturing one, can heavy equipment be leased or will it be added to start-up costs?

All other start-up costs should also be listed in the business plan. Apart from premises and equipment, these might include stock, training for the partners and staff, and legal and accountancy fees. Separately, consider the venture's fixed costs: these are payments that must be made regardless of the firm's output, such as rent, equipment, salaries and depreciation - the amount annually deducted from an item's value to account for wear and tear. Also account for variable costs such as stationery and traveling expenses.