How to write a business plan for a scriptwriting services company?

Putting together a business plan for a scriptwriting services company can be daunting - especially if you're creating a business for the first time - but with this comprehensive guide, you'll have the necessary tools to do it confidently.

We will explore why writing one is so important in both starting up and growing an existing scriptwriting services company, as well as what should go into making an effective plan - from its structure to content - and what tools can be used to streamline the process and avoid errors.

Without further ado, let us begin!

Why write a business plan for a scriptwriting services company?

Having a clear understanding of why you want to write a business plan for your scriptwriting services company will make it simpler for you to grasp the rationale behind its structure and content. So before delving into the plan's actual details, let's take a moment to remind ourselves of the primary reasons why you'd want to create a scriptwriting services company business plan.

To have a clear roadmap to grow the business

It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...

In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for a scriptwriting services company is essential to create successful and sustainable businesses.

To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.

Once you know where you want your scriptwriting services company to be, you'll have to identify:

• what resources (human, equipment, and capital) are needed to get there,
• at what pace the business needs to progress to get there in time,
• and what risks you'll face along the way.

Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.

To maintain visibility on future cash flows

Businesses can go for years without making a profit, but they go bust as soon as they run out of cash. That's why "cash is king", and maintaining visibility on your scriptwriting services company's future cash flows is critical.

How do I do that? That's simple: you need an up-to-date financial forecast.

The good news is that your scriptwriting services company business plan already contains a financial forecast (more on that later in this guide), so all you have to do is to keep it up-to-date.

To do this, you need to regularly compare the actual financial performance of your business to what was planned in your financial forecast, and adjust the forecast based on the current trajectory of your business.

Monitoring your scriptwriting services company's financial health will enable you to identify potential financial problems (such as an unexpected cash shortfall) early and to put in place corrective measures. It will also allow you to detect and capitalize on potential growth opportunities (higher demand from a given segment of customers for example).

To secure financing

A detailed business plan becomes a crucial tool when seeking financing from banks or investors for your scriptwriting services company.

Investing and lending to small businesses are very risky activities given how fragile they are. Therefore, financiers have to take extra precautions before putting their capital at risk.

At a minimum, financiers will want to ensure that you have a clear roadmap and a solid understanding of your future cash flows (like we just explained above). But they will also want to ensure that your business plan fits the risk/reward profile they seek.

This will off-course vary from bank to bank and investor to investor, but as a rule of thumb. Banks will want to see a conservative financial management style (low risk), and they will use the information in your business plan to assess your borrowing capacity — the level of debt they think your business can comfortably handle — and your ability to repay the loan. This evaluation will determine whether they'll provide credit to your scriptwriting services company and the terms of the agreement.

Whereas investors will carefully analyze your business plan to gauge the potential return on their investment. Their focus lies on evidence indicating your scriptwriting services company's potential for high growth, profitability, and consistent cash flow generation over time.

Now that you recognize the importance of creating a business plan for your scriptwriting services company, let's explore what information is required to create a compelling plan.

Information needed to create a business plan for a scriptwriting services company

You need the right data in order to project sales, investments and costs accurately in the financial forecast of your scriptwriting services company business plan.

Below, we'll cover three key pieces of information you should gather before drafting your business plan.

Carrying out market research for a scriptwriting services company

Carrying out market research before writing a business plan for a scriptwriting services company is essential to ensure that the financial projections are accurate and realistic.

Market research helps you gain insight into your target customer base, competitors, pricing strategies and other key factors which can have an impact on the commercial success of your business.

In particular, it is useful in forecasting revenue as it provides valuable data regarding potential customers’ spending habits and preferences.

You may find that clients are increasingly looking for services that offer comprehensive packages, from developing the initial concept to completing the finished script. Additionally, there could be a trend towards clients looking for scriptwriting services that specialize in certain genres, such as comedy or horror.

This information can then be used to create more accurate financial projections which will help investors make informed decisions about investing in your scriptwriting services company.

Developing the sales and marketing plan for a scriptwriting services company

Budgeting sales and marketing expenses is essential before creating a scriptwriting services company business plan.

A comprehensive sales and marketing plan should provide an accurate projection of what actions need to be implemented to acquire and retain customers, how many people are needed to carry out these initiatives, and how much needs to be spent on promotions, advertising, and other aspects.

This helps ensure that the right amount of resources is allocated to these activities in order to hit the sales and growth objectives forecasted in your business plan.

The staffing and capital expenditure requirements of a scriptwriting services company

Whether you are starting or expanding a scriptwriting 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.

Staffing costs: The company might need to pay writers, editors, and other staff to create scripts and provide other services. Equipment costs: The company might need to purchase computers, software, and other equipment to help its staff produce scripts.

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 scriptwriting services company, it is time to start creating your financial forecast.

What goes into your scriptwriting services company's financial forecast?

The financial forecast of your scriptwriting 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 scriptwriting 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

Your scriptwriting services company forecasted P&L statement enables the reader of your business plan to get an idea of how much revenue and profits your business is expected to make in the near future.

Ideally, your reader will want to see:

• Growth above the inflation level
• Expanding profit margins
• Positive net profit throughout the plan

Expectations for an established scriptwriting services company will of course be different than for a startup. Existing businesses which have reached their cruising altitude might have slower growth and higher margins than ventures just being started.

The projected balance sheet of your scriptwriting services company

The balance sheet for a scriptwriting services company is a financial document that provides a snapshot of your business’s financial health at a given point in time.

It shows three main components: assets, liabilities and equity:

• Assets: are resources owned by the business, such as cash, equipment, and accounts receivable (money owed by clients).
• Liabilities: are debts owed to creditors and other entities, such as accounts payable (money owed to suppliers) and loans.
• Equity: includes the sums invested by the shareholders or business owners and the cumulative profits and losses of the business to date (called retained earnings). It is a proxy for the value of the owner's stake in the business.

Examining the balance sheet is important for lenders, investors, or other stakeholders who are interested in assessing your scriptwriting services company's liquidity and solvency:

• Liquidity: assesses whether or not your business has sufficient cash and short-term assets to honour its liabilities due over the next 12 months. It is a short-term focus.
• Solvency: assesses whether or not your business has the capacity to repay its debt over the medium-term.

Looking at the balance sheet can also provide insights into your scriptwriting services company's investment and financing policies.

In particular, stakeholders can compare the value of equity to the value of the outstanding financial debt to assess how the business is funded and what level of financial risk has been taken by the owners (financial debt is riskier because it has to be repaid, while equity doesn't need to be repaid).

The cash flow forecast

A projected cash flow statement for a scriptwriting 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 scriptwriting 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 scriptwriting services company is appropriately funded.

The initial financing plan

The initial financing plan - also called a sources and uses table - is an important tool when starting a scriptwriting services company.

It shows where the money needed to set up the business will come from (sources) and how it will be allocated (uses).

Having this table helps understand what costs are involved in setting up the scriptwriting services company, how the risks are distributed between the shareholders and the lenders, and what will be the starting cash position (which needs to be sufficient to sustain operations until the business breaks even).

Now that the financial forecast of a scriptwriting services company business plan is understood, let's focus on what goes into the written part of the plan.

The written part of a scriptwriting 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 scriptwriting services company business plan is composed of 7 main sections:

1. The executive summary
2. The presentation of the company
3. The products and services
4. The market analysis
5. The strategy
6. The operations
7. The financial plan

Let's go through the content of each section in more detail!

1. The executive summary

The first section of your scriptwriting services company's business plan is the executive summary which provides, as its name suggests, an enticing summary of your plan which should hook the reader and make them want to know more about your business.

When writing the executive summary, it is important to provide an overview of the business, the market, the key financials, and what you are asking from the reader.

Start with a brief introduction of the business, its name, concept, location, how long it has been in operation, and what makes it unique. Mention any services or products you plan to offer and who you sell to.

Then you should follow with an overview of the addressable market for your scriptwriting services company, current trends, and potential growth opportunities.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Finally, you should detail any funding requirements in the ask section.

2. The presentation of the company

The second section in your scriptwriting services company's business plan should focus on the structure and ownership, location, and management team of the company.

The structure and ownership part provides an overview of the legal structure of the business, who the owners are and how much each has invested and owns. If you are seeking financing it is important that the reader gets a clear picture of which legal entity is receiving the funds, and who controls the business.

The location part should give an overview of the premises from which the company is operating, and why that location is of particular interest (catchment area, accessibility, amenities nearby, etc.).

When describing the location of your scriptwriting services company, you could emphasize the potential for access to a wide range of resources. It may be located in a thriving metropolitan area, with a highly-educated population and a diverse economy. This could give you a competitive advantage when it comes to recruiting talented staff, as well as providing access to a network of potential partners and clients. Additionally, the area may have low overhead costs, allowing you to focus on investing in the growth of your business.

Finally, you should introduce the management team. Explain each member's role, background, and experience.

It is also important to emphasize any past successes that the members of the management team have achieved, and how long they've been working together, as this will help potential lenders or investors understand why they should trust in their leadership.

3. The products and services section

The products and services section of your business plan should include a detailed description of the offerings that your company provides to its customers. 

For example, your scriptwriting services company might offer services such as script development, preproduction planning, and film production. Script development allows customers to craft a story with an effective structure, while preproduction planning helps them create a production timeline and secure the necessary resources. Production services enable customers to bring their script to life with a full cast and crew. These services ensure customers have a complete package for their script, from concept to production.

When drafting this section, you should be precise about the categories of products or services you sell, the types of customers you are targeting and how customers can buy them.

4. The market analysis

When presenting your market analysis in your scriptwriting services company business plan, you should detail the customers' demographics and segmentation, target market, competition, barriers to entry, and any regulations that may apply.

The goal of this section is to help the reader understand how big and attractive your market is, and demonstrate that you have a solid understanding of the industry.

You should start with the demographics and segmentation subsection, which gives an overview of the addressable market for your scriptwriting services company, the main trends in the marketplace, and introduces the different customer segments and their preferences in terms of purchasing habits and budgets.

The target market section should follow and zoom on the customer segments your scriptwriting services company is targeting, and explain how your products and services meet the specific needs of these customers.

For example, your target market might include independent filmmakers looking to create a narrative feature-length film. These filmmakers need a scriptwriter who understands the story and characters they are trying to create. They may also need help with the overall structure, dialogue, pacing, and tone of the script.

Then comes the competition subsection, where you should introduce your main competitors and explain what differentiates you from them.

Finally, you should finish your market analysis by giving an overview of the main regulations applicable to your scriptwriting services company.

5. The strategy section

When writing the strategy section of a business plan for your scriptwriting services company, it is essential to include information about your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

The competitive edge subsection should explain what sets your company apart from its competitors. This part is especially key if you are writing the business plan of a startup, as you have to make a name for yourself in the marketplace against established players.

The pricing strategy subsection should demonstrate how you intend to remain profitable while still offering competitive prices to your customers.

The sales & marketing plan should outline how you intend to reach out and acquire new customers, as well as retain existing ones with loyalty programs or special offers. 

The milestones subsection should outline what your company has achieved to date, and its main objectives for the years to come - along with dates so that everyone involved has clear expectations of when progress can be expected.

The risks and mitigants subsection should list the main risks that jeopardize the execution of your plan and explain what measures you have taken to minimize these. This is essential in order for investors or lenders to feel secure in investing in your venture.

You might face the risk of clients not being satisfied with the services you provide. If the scriptwriting services you offer are not up to scratch, the client may be disappointed and not use your services again. You could also face the risk of not being able to meet tight deadlines. If a client requests a script to be written within a short period of time, you may struggle to provide the script within the allotted timeframe. This could lead to a dissatisfied client.

6. The operations section

The operations of your scriptwriting services company must be presented in detail in your business plan.

Begin by addressing your staff, specifying the main roles and your recruitment plan to support the anticipated growth. Outline the qualifications and experience needed for each role and discuss your recruitment strategies, which may involve using job boards, referrals, or headhunters.

Next, clearly state your scriptwriting services company's operating hours, allowing the reader to gauge the adequacy of your staffing levels. Additionally, mention any considerations for varying opening times during peak seasons and your approach to handling customer queries outside regular operating hours.

The key assets and intellectual property (IP) required to run your business should also be highlighted. If you rely on licenses, trademarks, physical structures like equipment or property, or lease agreements, ensure they are well-documented in this section.

You may have key assets that include intellectual property such as screenplays and scripts, as well as the services you offer. Your company could also possess the skills and knowledge of the scriptwriters on your team. These skills and knowledge, along with the scripts created, may be invaluable assets in the scriptwriting services industry.

Finally, provide a comprehensive list of suppliers you intend to collaborate with, along with a breakdown of their services and main commercial terms, such as price, payment terms, break clauses and contract duration. Investors often seek insight into the reasons behind your supplier choices, which may include a preference for higher-quality products or established relationships from past 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 scriptwriting 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 scriptwriting services company's business plan?

There are two main ways of creating your scriptwriting services company business plan:

• Using specialized business planning software,
• Hiring a business plan writer.

Using an online business plan software for your scriptwriting services company's business plan

Using online business planning software is the most efficient and modern way to create a scriptwriting 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.

Hiring a business plan writer to write your scriptwriting services company's business plan

Outsourcing your scriptwriting 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 scriptwriting 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 scriptwriting services company's business plan using Word or Excel?

I must advise against using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write your scriptwriting services company business plan. Let me explain why.

Firstly, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is highly technical and requires a strong grasp of accounting principles and financial modelling skills. It is, therefore, unlikely that anyone will fully trust your numbers unless you have both a degree in finance and accounting and significant financial modelling experience, like us at The Business Plan Shop.

Secondly, relying on spreadsheets is inefficient. While it may have been the only option in the past, technology has advanced significantly, and software can now perform these tasks much faster and with greater accuracy. With the rise of AI, software can even help us detect mistakes in forecasts and analyze the numbers for better decision-making.

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.

Moreover, software makes it easier to compare actuals versus forecasts and maintain up-to-date forecasts to keep visibility on future cash flows, as we discussed earlier in this guide. This task is cumbersome when using spreadsheets.

Now, let's talk about the written part of your scriptwriting services company business plan. While it may be less error-prone, using software can bring tremendous gains in productivity. Word processors, for example, lack instructions and examples for each part of your business plan. They also won't automatically update your numbers when changes occur in your forecast, and they don't handle formatting for you.

Overall, while Word or Excel may seem viable for some entrepreneurs to create a business plan, it's by far becoming an antiquated way of doing things.

Takeaways

1. Having an up-to-date business plan is key to maintaining visibility on your future cash flows.
2. 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.
3. 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 scriptwriting services company. If you still have questions, do not hesitate to contact us.

Also on The Business Plan Shop

• How to write a 5 years business plan
• How to make a business plan look professional
• Business plan vs strategic plan
• Business plan to convince a cofounder
• Business plan myths

Know someone who owns or wants to start a scriptwriting services company? Share this article with them!