How to write a business plan for a business support services company?
Writing a business plan for a business support services company can be an intimidating task, especially for those just starting.
This in-depth guide is designed to help entrepreneurs like you understand how to create a comprehensive business plan so that you can approach the exercise with method and confidence.
We'll cover: why writing a business support services company business plan is so important - both when starting up, and when running and growing the business - what information you need to include in your plan, how it should be structured, and what tools you can use to get the job done efficiently.
Let's get started!
Why write a business plan for a business support services company?
Being clear on the scope and goals of the document will make it easier to understand its structure and content. So before diving into the actual content of the plan, let's have a quick look at the main reasons why you would want to write a business support services company business plan in the first place.
To have a clear roadmap to grow the business
Small businesses rarely experience a constant and predictable environment. Economic cycles go up and down, while the business landscape is mutating constantly with new regulations, technologies, competitors, and consumer behaviours emerging when we least expect it.
In this dynamic context, it's essential to have a clear roadmap for your business support services company. Otherwise, you are navigating in the dark which is dangerous given that - as a business owner - your capital is at risk.
That's why crafting a well-thought-out business plan is crucial to ensure the long-term success and sustainability of your venture.
To create an effective business plan, you'll need to take a step-by-step approach. First, you'll have to assess your current position (if you're already in business), and then identify where you'd like your business support services company to be in the next three to five years.
Once you have a clear destination for your business support services company, you'll focus on three key areas:
- Resources: you'll determine the human, equipment, and capital resources needed to reach your goals successfully.
- Speed: you'll establish the optimal pace at which your business needs to grow if it is to meet its objectives within the desired timeframe.
- Risks: you'll identify and address potential risks you might encounter along the way.
By going through this process regularly, you'll be able to make informed decisions about resource allocation, paving the way for the long-term success of your business.
To get visibility on future cash flows
If your small business support services company runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your business support services company's future cash flows.
So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.
The good news is that your business support services company business plan already includes a financial forecast (which we'll discuss further in this guide). Your task is to ensure it stays current.
To accomplish this, it's essential to regularly compare your actual financial performance with what was planned in your financial forecast. Based on your business's current trajectory, you can make adjustments to the forecast.
By diligently monitoring your business support services company's financial health, you'll be able to spot potential financial issues, like unexpected cash shortfalls, early on and take corrective actions. Moreover, this practice will enable you to recognize and capitalize on growth opportunities, such as excess cash flow enabling you to expand to new locations.
To secure financing
Whether you are a startup or an existing business, writing a detailed business support services company business plan is essential when seeking financing from banks or investors.
This makes sense given what we've just seen: financiers want to ensure you have a clear roadmap and visibility on your future cash flows.
Banks will use the information included in the plan to assess your borrowing capacity (how much debt your business can support) and your ability to repay the loan before deciding whether they will extend credit to your business and on what terms.
Similarly, investors will review your plan carefully to assess if their investment can generate an attractive return on investment.
To do so, they will be looking for evidence that your business support services company has the potential for healthy growth, profitability, and cash flow generation over time.
Now that you understand why it is important to create a business plan for a business support services company, let's take a look at what information is needed to create one.
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Information needed to create a business plan for a business support services company
Drafting a business support services company business plan requires research so that you can project sales, investments and cost accurately in your financial forecast, and convince the reader that there is a viable commercial opportunity to be seized.
Below, we'll focus on three critical pieces of information you should gather before starting to write your plan.
Carrying out market research for a business support services company
As you consider writing your business plan for a business support services company, conducting market research becomes a vital step to ensure accurate and realistic financial projections.
Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.
Through this research, you may uncover trends that could influence your business support services company.
1. Your market research may reveal that potential customers could be looking for more comprehensive service packages that combine several services into one package. 2. Your market research also might indicate that customers may be looking for a more personalized approach to services, with dedicated customer service teams for each client.
Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.
By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your business support services company.
Developing the sales and marketing plan for a business support services company
As you embark on creating your business support services company business plan, it is crucial to budget sales and marketing expenses beforehand.
A well-defined sales and marketing plan should include precise projections of the actions required to acquire and retain customers. It will also outline the necessary workforce to execute these initiatives and the budget required for promotions, advertising, and other marketing efforts.
This approach ensures that the appropriate amount of resources is allocated to these activities, aligning with the sales and growth objectives outlined in your business plan.
The staffing and capital expenditure requirements of a business support services company
Whether you are starting or expanding a business support services company, it is important to have a clear plan for recruitment and capital expenditures (investment in equipment and real estate) in order to ensure the success of the business.
Both the recruitment and investment plans need to be coherent with the timing and level of growth planned in your forecast, and require appropriate funding.
A business support services company might incur the cost of hiring administrative staff, such as receptionists, office managers, and bookkeepers. They may also have to purchase or lease hardware and software, such as computers, printers, scanners, and telephone systems. Additionally, they may need to obtain office supplies, such as paper, pens, and other items. They may also have to invest in furniture, such as desks, chairs, and filing cabinets. Finally, they may need to pay for office space rental, utilities, and other expenses.
In order to create a realistic financial forecast, you will also need to consider the other operating expenses associated with running the business on a day-to-day basis (insurance, bookkeeping, etc.).
Once you have all the necessary information to create a business plan for your business support services company, it is time to start creating your financial forecast.
What goes into your business support services company's financial forecast?
The financial forecast of your business support services company's business plan will enable you to assess the growth, profitability, funding requirements, and cash generation potential of your business in the coming years.
The four key outputs of a financial forecast for a business support services company are:
- The profit and loss (P&L) statement,
- The projected balance sheet,
- The cash flow forecast,
- And the sources and uses table.
Let's look at each of these in a bit more detail.
The projected P&L statement
The projected P&L statement for a business support services company shows how much revenue and profit your business is expected to make in the future.
A healthy business support services company's P&L statement should show:
- Sales growing at (minimum) or above (better) inflation
- Stable (minimum) or expanding (better) profit margins
- A healthy level of net profitability
This will of course depend on the stage of your business: numbers for a startup will look different than for an established business support services company.
The forecasted balance sheet of your business support services company
The projected balance sheet of your business support services company will enable the reader of your business plan to assess the overall financial health of your business.
It shows three elements: assets, liabilities and equity:
- Assets: are productive resources owned by the business, such as equipment, cash, and accounts receivable (money owed by clients).
- Liabilities: are debts owed to creditors, lenders, and other entities, such as accounts payable (money owed to suppliers).
- Equity: includes the sums invested by the shareholders or business owners and the profits and losses accumulated by the business to date (which are called retained earnings). It is a proxy for the value of the owner's stake in the business.
Analysing your business support services company projected balance sheet provides an understanding of your business support services company's working capital structure, investment and financing policies.
In particular, the readers of your plan can compare the level of financial debt on the balance sheet to the equity value to measure the level of financial risk (equity doesn't need to be reimbursed, while financial debt must be repaid, making it riskier).
They can also use your balance sheet to assess your business support services company's liquidity and solvency:
- A liquidity analysis: focuses on whether or not your business has sufficient cash and short-term assets to cover its liabilities due in the next 12 months.
- A solvency analysis: takes and longer view to assess whether or not your business has the capacity to repay its debts over the medium-term.
The cash flow forecast
A projected cash flow statement for a business support services company is used to show how much cash the business is generating or consuming.
The cash flow forecast is usually organized by nature to show three key metrics:
- The operating cash flow: do the core business activities generate or consume cash?
- The investing cash flow: how much is the business investing in long-term assets (this is usually compared to the level of fixed assets on the balance sheet to assess whether the business is regularly maintaining and renewing its equipment)?
- The financing cash flow: is the business raising new financing or repaying financiers (debt repayment, dividends)?
As we discussed earlier, cash is king and keeping an eye on future cash flows an imperative for running a successful business. Therefore, you can expect the reader of your business support services company business plan to pay close attention to your cash flow forecast.
Also, note that it is customary to provide both yearly and monthly cash flow forecasts in a business plan - so that the reader can analyze seasonal variation and ensure the business support services company is appropriately funded.
The initial financing plan
The initial financing plan, also known as a sources and uses table, is a valuable resource to have in your business plan when starting your business support services company as it reveals the origins of the money needed to establish the business (sources) and how it will be allocated (uses).
Having this table helps show what costs are involved in setting up your business support services company, how risks are shared between founders, investors and lenders, and what the starting cash position will be. This cash position needs to be sufficient to sustain operations until the business reaches a break-even point.
Now that you have a clear understanding of what goes into the financial forecast of your business support services company business plan, let's shift our focus to the written part of the plan.
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The written part of a business support services company business plan
The written part of the business plan is where you will explain what your business does and how it operates, what your target market is, whom you compete against, and what strategy you will put in place to seize the commercial opportunity you've identified.
Having this context is key for the reader to form a view on whether or not they believe that your plan is achievable and the numbers in your forecast realistic.
The written part of a business support services company business plan is composed of 7 main sections:
- The executive summary
- The presentation of the company
- The products and services
- The market analysis
- The strategy
- The operations
- The financial plan
Let's go through the content of each section in more detail!
1. The executive summary
In your business support services company's business plan, the first section is the executive summary — a captivating overview of your plan that aims to pique the reader's interest and leave them eager to learn more about your business.
When crafting the executive summary, start with an introduction to your business, including its name, concept, location, how long it has been running, and what sets it apart. Briefly mention the products and services you plan to offer and your target customer profile.
Following that, provide an overview of the addressable market for your business support services company, current trends, and potential growth opportunities.
Next, include a summary of key financial figures like projected revenues, profits, and cash flows.
Finally, in the "ask" section, detail any funding requirements you may have.
2. The presentation of the company
In your business support services company business plan, the second section should focus on the structure and ownership, location, and management team of your company.
In the structure and ownership part, you'll provide an overview of the business's legal structure, details about the owners, and their respective investments and ownership shares. This clarity is crucial, especially if you're seeking financing, as it helps the reader understand which legal entity will receive the funds and who controls the business.
Moving on to the location part, you'll offer an overview of the company's premises and their surroundings. Explain why this particular location is of interest, highlighting factors like catchment area, accessibility, and nearby amenities.
When describing the location of your business support services company, you might explain that it is located in a prime business district that could provide a competitive advantage. The area could have a wide variety of amenities, such as nearby transportation hubs, restaurants, and retail stores, that could appeal to potential customers. Additionally, you could emphasize that the area has a strong and diverse economy that could generate increased interest in the services your company provides. Finally, you could point out that the region has access to a talented workforce that could help your business remain successful over the long term.
Finally, you should introduce your management team. Describe each member's role, background, and experience.
Don't forget to emphasize any past successes achieved by the management team and how long they've been working together. Demonstrating their track record and teamwork will help potential lenders or investors gain confidence in their leadership and ability to execute the business plan.
3. The products and services section
The products and services section of your business plan should include a detailed description of what your company offers, who are the target customers, and what distribution channels are part of your go-to-market.
For example, your business support services company could offer marketing and communications consultation services to help guide customers in making strategic decisions for their businesses. It could also provide PR and media support services, such as writing press releases and helping to build relationships with key media outlets. Additionally, it could offer administrative services to assist customers with operational tasks, such as bookkeeping, data entry, and document management. These services would help customers to maintain their operations in an efficient and cost-effective manner while freeing them up to focus on other areas of their business.
4. The market analysis
When outlining your market analysis in the business support services company business plan, it's essential to include comprehensive details about customers' demographics and segmentation, target market, competition, barriers to entry, and relevant regulations.
The primary aim of this section is to give the reader an understanding of the market size and appeal while demonstrating your expertise in the industry.
To begin, delve into the demographics and segmentation subsection, providing an overview of the addressable market for your business support services company, key marketplace trends, and introducing various customer segments and their preferences in terms of purchasing habits and budgets.
Next, shift your focus to the target market subsection, where you can zoom in on the specific customer segments your business support services company targets. Explain how your products and services are tailored to meet the unique needs of these customers.
For example, your target market might include small business owners who are just starting out. They need help with tasks such as setting up their company, organizing their finances, or even finding a location. This segment is often overwhelmed and needs assistance getting the basics in place so that they can focus on running their business.
In the competition subsection, introduce your main competitors and explain what sets your business support services company apart from them.
Finally, round off your market analysis by providing an overview of the main regulations that apply to your business support services company.
5. The strategy section
When crafting the strategy section of your business plan for your business support services company, it's important to cover several key aspects, including your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.
In the competitive edge subsection, clearly explain what sets your company apart from competitors. This is particularly critical if you're a startup, as you'll be trying to establish your presence in the marketplace among entrenched players.
The pricing strategy subsection should demonstrate how you aim to maintain profitability while offering competitive prices to your customers.
For the sales & marketing plan, outline how you plan to reach and acquire new customers, as well as retain existing ones through loyalty programs or special offers.
In the milestones subsection, detail what your company has achieved thus far and outline your primary objectives for the coming years by including specific dates for expected progress. This ensures everyone involved has clear expectations.
Lastly, in the risks and mitigants subsection, list the main risks that could potentially impact the execution of your plan. Explain the measures you've taken to minimize these risks. This is vital for investors or lenders to feel confident in supporting your venture - try to proactively address any objection they might have.
Your business support services company could face potential risks related to its personnel and financial resources. On the personnel side, your company may not be able to meet the demands of its clients if it does not have enough staff or the right expertise. This could lead to customer dissatisfaction and a decline in revenue. On the financial side, your company might suffer from unexpected costs due to unexpected events such as legal fees or natural disasters. These unexpected costs could put a strain on the company’s resources and could threaten its financial stability.
6. The operations section
In your business plan, it's also essential to provide a detailed overview of the operations of your business support services company.
Start by covering your team, highlighting key roles and your recruitment plan to support the expected growth. Outline the qualifications and experience required for each role and your intended recruitment methods, whether through job boards, referrals, or headhunters.
Next, clearly state your business support services company's operating hours, allowing the reader to assess staffing levels adequately. Additionally, mention any plans for varying opening times during peak seasons and how you'll handle customer queries outside normal operating hours.
Then, shift your focus to the key assets and intellectual property (IP) necessary for your business. If you rely on licenses, trademarks, physical structures like equipment or property, or lease agreements, make sure to include them in this section.
You may have key assets such as client relationships and proprietary software. Client relationships are often developed over time and can be a valuable asset to your business support services company. Proprietary software is another key asset that could give your company an edge over your competitors. Additionally, your business support services company may have intellectual property (IP) such as confidential information about clients, customer databases, and innovative processes. This IP could be used to differentiate your business from others in the industry and can be a powerful asset.
Lastly, include a list of suppliers you plan to work with, detailing their services and main commercial terms, such as price, payment terms, and contract duration. Investors are interested in understanding why you've chosen specific suppliers, which may be due to higher-quality products or established relationships from previous ventures.
7. The presentation of the financial plan
The financial plan section is where we will include the financial forecast we talked about earlier in this guide.
Now that you have a clear idea of the content of a business support services company business plan, let's look at some of the tools you can use to create yours.
What tool should I use to write my business support services company's business plan?
In this section, we will be reviewing the two main options for writing a business support services company business plan efficiently:
- Using specialized software,
- Outsourcing the drafting to the business plan writer.
Using an online business plan software for your business support services company's business plan
Using online business planning software is the most efficient and modern way to write a business support services company business plan.
There are several advantages to using specialized software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can easily track your actual financial performance against your financial forecast
- You can create scenarios to stress test your forecast's main assumptions
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.
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Hiring a business plan writer to write your business support services company's business plan
Outsourcing your business support services company business plan to a business plan writer can also be a viable option.
Business plan writers are experienced in writing business plans and adept at creating financial forecasts without errors. Furthermore, hiring a consultant can save you time and allow you to focus on the day-to-day operations of your business.
However, hiring business plan writers is expensive as you are paying for the software used by the consultant, plus their time, and their profit margin of course.
From experience, you need to budget at least £1.5k ($2.0k) excluding tax for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders or investors).
You also need to be careful when seeking investment. Investors want their money to be used to grow the business, not spent on consulting fees. Therefore, the amount you spend on business plan writing services (and other consulting services such as legal services) needs to be negligible relative to the amount raised.
The other drawback is that you usually don't own the business plan itself: you just get the output, while the actual document is saved in the consultant's business plan software - which makes it difficult to maintain the document up to date without hiring the consultant on a retainer.
For these reasons, outsourcing the business support services company business plan to a business plan writer should be considered carefully, weighing both the advantages and disadvantages of hiring outside help.
Ultimately, it may be the right decision for some businesses, while others may find it beneficial to write their business plan using online software.
Why not create your business support services company's business plan using Word or Excel?
Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write a business support services company business plan is a terrible idea.
Why?
For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.
As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.
The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.
And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.
Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.
That's for the forecast, but what about the written part of my business support services company business plan?
This part is less error-prone, but here also software brings tremendous gains in productivity:
- Word processors don't include instructions and examples for each part of your business plan
- Word processors don't update your numbers automatically when they change in your forecast
- Word processors don't handle the formatting for you
- ...
Overall, while Word or Excel may be viable options for creating a business support services company business plan for some entrepreneurs, it is by far not the best or most efficient solution.
Takeaways
- Having an up-to-date business plan is key to maintaining visibility on your future cash flows.
- A business plan has 2 parts: a financial forecast highlighting the expected growth, profitability and cash generation of the business; and a written part which provides the context needed to interpret and assess the quality of the forecast.
- Using business plan software is the modern way of writing and maintaining business plans.
We hope that this guide helped you to better understand how to write the business plan for a business support services company. If you still have questions, do not hesitate to contact us.
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Founder & CEO at The Business Plan Shop Ltd
