When you hear the term “business plan” it's easy to be put off by the thought of some huge complicated dossier. But don't worry, it doesn't need to be as complicated as that. At this stage we're more interested in why you want to set up your business, who you want to serve, what problems you've identified, and how you aim to solve them.

On this episode we're going to look at some examples from photographer Julie Christie, and shop owner Nicola Donnelly. Why did they decide to start their own businesses? How did they go about it? What can you learn from their experiences, and what advice do they have for you?

When it comes to the money side of things, we need to have a think about your anticipated startup and running costs. Then we can look at how much we can expect to earn, and figure out if this is a sustainable income for you to live on. For this segment we've brought accountant Gordon Howes on board.

And recruitment consultant Patricia McGuire has some advice for you on your long term goals. What kind of company would you like to have eventually? What would it look like, and how would you fit into it? Being clear on this can help you to work towards your goals, even if they seem a long way off at this early stage.

Finally, two of the biggest things that hold people back are

1. Over-planning to the point that they never start


2. Fear – just being so scared of what might go wrong

Recognising these obstacles early on is important if we want to overcome them. Yes, you're taking a risk, but you take a risk leaving the house each morning. As the old saying goes “A ship is safer in the harbour, but that's not what ships are for.”

Transcript

If anyone was thinking about starting their own business, they felt they had a good idea, they had what it took to make it work, then I would say go for it.

Hey folks, I’m Colin Gray and this is Business Startup UK – the podcast which takes you, step by step, through creating your own business. Since this is the first show, it’s probably worth a little introduction here. As you’ve guessed, this is all about starting a company. There’s obviously a huge range of possibilities there. Maybe you’re looking to register self-employed so that you can do a bit of freelance work outside your main job. Maybe you’re going full time in the business, but there’s no need for a limited company yet. Or maybe you’re jumping in, feet first, and setting up a business with employees, VAT and all the rest, right off the bat. Whatever your aims, there are a lot of steps they have in common. Over the coming 6 episodes I’m aiming, with the help of many others, to give you a full grounding in business startup in the UK. That means what you need to prepare, what you need to think about and what you need to do as you set up your company. By the end of this first series, you should have a really good idea of your first steps, the pitfalls, the things to watch out for along the way.

In case you’re wondering who on earth I am, my name’s Colin Gray and I’m the founder of The Podcast Host. As you’ll guess from the name, we make podcasts and we help other businesses to do that too. I first went self-employed around 10 years ago now, I’ve set up 2 limited companies and helped with a fair few others. I definitely don’t know it all, though, and during this series we’ll be talking to a big range of other people about their experience. Some are experts in finance, law, sales or marketing, and others are just business owners – people who’ve gone through the same experience. We’ll be hearing about the highs, the lows, the tops and the pitfalls. All of this with the aim of making the whole process much, much easier for you.

So, enough explanation – let’s get to the meat of it. In this episode we’re talking about that first step for many – the business plan. Saying that, don’t worry, we’re not jumping straight into a 20 page document with super detailed market analysis, customer segmentation and financial projections – I’m just talking the plan for your business which you build up over a little time. It’s starts out with a look at who you’re serving, what you’re selling them and why they’ll buy it from you. But, even before that, why do you want to make this plan in the first place?

Julie Christie: I'm Julie Christie and I run a portrait photography business called Julie Christie Photography in Carnoustie. I was forced into making the decision to start my own business because we moved Howes from Glasgow to Carnoustie. I found myself out of job. I hadn't really been enjoying my teaching job and I thought, “Well, this is the time to do this. It's going to make or break. I'll do it.”

Quite a few people start out this way. They end up in business almost by chance. It just seemed like the best decision at the time, or, actually, it was the only decision to make! Others, though, they can't stand the thought of not doing it, not solving this problem out there that just seems so obvious to them.

Nicola Donnelly: I have always wanted to own a shop. I put it down to childhood dream for many years.

That’s Nicola Donnelly – owner of the Time Lifestyle Boutique in Dundee, and purveyor of many fine gifts

Nicola Donnelly: I went – . I did live sciences. I worked in comms and marketing. There was this niggling feeling in the background. Actually, I still wanted to run my shop.

That’s how it starts for many. Just this itch, that won’t go away. This desire to try something for yourself – something of your own. So, we mentioned planning at the start. How do you turn that itch into something that can sustain you, sustain others, maybe even grow into something huge? That’s where the planning comes in.

Nicola Donelly: I did my research. I decided now was probably quite a good time for Dundee, things were on the up. There was lots of exciting things happening in the city. I did my research and I decided what kind of shop that would be.

So, Nicola had the desire first, and then figured out the idea later. Others have the idea first, and the research then goes into whether that idea really has legs. The key thing here is figuring out the problem you’re solving and whether it’s a big enough problem to encourage people to pay for it.

Patricia McGuire: Have in the back of your mind some of the problems you think they're going to have. Pick up the phone and make the first call.

That was Patricia McGuire who runs a recruitment company in Switzerland. She brings up the biggest part of this stage – and that’s talking. You’ve got an idea, but you need to check that the problem really exists for your customers. In a lot of cases, you’ll discover it's actually not much of a problem for them or it's just not urgent enough to build a profitable business around.

Nicola Donelly: I did some surveying. I had a survey monkey questionnaire that went out and asked people what kind of things they felt were missing from High Street. I always had a hunch that it would go towards a lifestyle store. I asked people what their average spend would be. What brands they'd like to see. What kind of cash base or projects they'd want to see.

So Nicola had that hunch but, like Patricia, she went out and confirmed it existed with real people. She also confirmed that it's urgent enough as well– it’s painful enough that people are going to pay to fix it. That’s the basis for your business. It’s called your value proposition. What value are you offering your customers? What pain are you solving for them? And how much is that worth to them? If you’ve got that solved, then you’re well on the way. Alright, that’s the blue sky thinking, the possibilities, the aspirations. Sorry to bring us back down to earth, but the plan also needs the more day to day things like finances, costs, projections. Those are the bits that tend to put people off, aren’t they?

Gordon Howes: Now, you've probably had the business plan. You're thinking of some form of multi-layered spread sheet identifying all sorts of costs and income. It doesn't need to be as complex as that.

That was Gordon Howes, an accountant with Balfour Shaw. And, that’s what I was hoping he'd say. You do see the standard plan templates out there and they're really daunting. Seeing it laid out like that, all at once, can make it a huge barrier. But, there are ways to break it down, and there’s help too in doing it.

Nicola Donelly: I got help from Business Gateway to do my business plan. They helped me put it together. Actually going to their workshops helped me focus on a different chapter each week. Then, I built that up gradually.

So, it’s good to know that there are ways to make it easier. But, No matter how you dice it up, there’s a decent bit of work that goes into your business plan. You might think, why bother?

Nicola Donelly: I did, yes, actually apply for funding. A business plan was essential for that. It's also a really good idea to do anyway to keep you focused.

Convinced? Ok, I hope so. They’re right, you’re going to struggle to get money without one, in any way. And you’re also going to struggle to stay focused once you’re really in the weeds – once you’re struggling to keep the whole thing running. Suffice to say, there’s no point pretending that you’re going to stick to every letter of this plan once it hits the real world, but as they say, FAILING TO PLAN IS PLANNING TO FAIL.

Right, let’s look at the detail, what goes in here:

Nicola Donelly:</s