Cultural Enterprise Office

An introduction to the process of preparing and writing your first plan.

What is a business plan?

Quite simply, a business plan is a document that states five clear points: 

Business plans normally cover a period of three years and detail your ambitions for that time.

Why do you need a business plan?

A business plan is a vital tool that will help you order and define your working process logically. It should act as a checklist, making sure you’ve considered all the elements involved in establishing and running a successful business. It should make you think about whether it will work, provide you with an income and stand the test of time.

It’s important that your business plan also works as a selling document that clearly and concisely proves the value of investing in your work. It will be examined by investors, funding bodies, banks, financial institutions and advisory bodies used to seeing similar plans on a daily basis. So it’s important that your plan is clear, concise and considered, and that it stands out from the crowd.

Think about your target recipient and the information they need. It should reinforce business viability and be presented in a language and format they are familiar with.

A useful checklist

Your business plan should evolve with your business. Once you’re up and running, it can be a valuable reference point. Look at your original aims and ideas on a regular basis, and use them to check that your work and ideas are progressing as expected. 

• Are you achieving things at the rate you initially planned?
• Has your business or work modified or changed direction?
• Do you need to consider modifying your business plan to suit the needs of your changing and developing work?

Keep your plan up-to-date. Some businesses have a ‘rolling’ plan, rather than a finite three-year plan. Don’t be disheartened if it’s rejected by an investor, bank or funder. The right plan will take time and consideration to develop.

Some points to consider before your start your business plan: 

• What is the purpose of your work?
• What are your aims and objectives?
• Who is it for?
• Is your idea viable?
• Can you afford it?
• Do you have the necessary skills?
• What are your strengths and weaknesses?
• How do you start?
• Where can you get help?
• Where will the money come from?
• How could additional funding support and develop your idea?
• Does the idea have long-term potential?
• Where is your work placed in a local, regional, national and international context?
• Are there other artists working in the same field that could help or support your venture?
• Is there space in the market for your work?
• What happens if your plan is rejected by an investor or funder?
• Do you need a contingency plan? 

Benefits of preparing and writing a business plan

Preparing a business plan will force you to clarify exactly what it is you do, and what you want to do. It will make you describe and explain your work, and put those ideas down on paper clearly and concisely. It will logically define how you propose to turn your skills, talents and creativity into a viable and sustainable business venture. 

Your business plan will:

• Help you set long and short-term goals
• Help structure the process for establishing your venture
• Offer you the chance to analyse, survey and understand your target audience and their needs, the demand for your product and how it will ‘sell’ to them
• Highlight opportunities which could help your venture
• Make you assess your skills and strengths in the broader context of your peers
• Consolidate and clarify your ideas and abilities
• Highlight any flaws or impracticalities in your aims and objectives
• Present you with financial realities, the plain facts of whether your business is likely to succeed
• Help you formulate a best and worst case scenario, and a plan of action for each
• Help you research potential sources of funding
• Be an invaluable aid to growth and development, by supplying the information you need to develop the best and most suitable work

Applying for funding

A business plan is essential in the application process for a number of grants and investment awards. Creative Scotland, Scottish Enterprise, The Big Lottery Fund, local authorities and potential backers all look for a well-crafted plan. It is also vital for applications for alternative sources of funding, like sponsorship and match funding.

It’s a useful document for any individual or organisation considering capital development, or a long-term or large-scale project.

The planning process

The planning process can be as valuable to a business as the finished product itself.

Before you start, think about: 

• Why you’re writing a business plan
• Whether you have a viable product
• Whether you have a viable proposal
• Whether you have the necessary skills
• Does your project have longevity?
• Does your work have an audience?
• Does your work have a market?
• Who will be reading your business plan?
• How do you need to construct the document to suit them? – consider design, language and professional presentation.

Looking for finance

Your business plan will be examined in great detail before any potential investor will consider putting money into the proposition. They need to consider the likelihood of success and the potential for return on their original investment. This could be in terms of growth, profit, or product and audience development, depending on the type of investor.

Banks and lenders tend to prefer investing in secure, considered businesses that will provide slow growth and steady return. They also look for a strong, steady cash flow that will meet the repayment plan.

Remember that lenders and potential investors may spend no longer than 45 minutes assessing your proposal, so be clear and organised in your plan.

The planning period

It’s vital when planning your business that you make the time to seriously consider your wishes and needs as an artist. Don’t rush into the venture without thinking about the long-term effects of your actions.

Planning is about:

• Self-evaluation
• Identifying your strengths and weaknesses
• Setting objectives – achievable and measurable short and long-term goals
• Forming a clear plan of action
• Researching all available options to help your project succeed
• Designing and installing systems to monitor your progress and success

A SWOT (or SCOT) analysis is a useful tool to use during your planning period. Use it to address your Strengths, Weaknesses (or Challenges), Opportunities and Threats.

To maintain your motivation and be successful, your business must balance the things you’re passionate about with the things you’re best at. It must also provide enough finance. Without that balance, you’ll need to make revisions. If your plan is weak in any of those areas, the likely outcome is disillusionment, burn out and financial difficulties.

How to make your first business plan 

• Take your time – deal with small sections at a time, don’t try to tackle the whole thing at once
• Prepare and research – gather as much information and evidence as you can to support your ideas, and analyse different approaches and models to help your presentation
• Be thorough
• Do your market research – build a picture of your audience, and where and how they will access your work
• Work with what you know first, research other areas as you progress
• Use clear, simple language and a legible typeface
• Don’t over-use jargon, but do express your technical knowledge
• Use bullet points where possible, and write short, easily readable paragraphs - keep it short and snappy
• Express your enthusiasm and commitment to your project, and your belief in the success of your venture
• You may add a creative element to your presentation (e.g. A visual artist may include visuals) – but don’t go to extremes
• Ensure your document is logical, that it’s prepared and presented to a high standard, and that the contents are verifiable
• Ask friends, relatives, peers and/or advisers to comment on it

Finally

Remember, your business plan is designed to benefit you. It will:

• Act as a clear, concise summary of your business proposal
• Offer people a document they will easily understand
• Act as a sales and marketing tool to help you raise funding and financial support
• Give you and your business a professional profile
• Work as a useful guidebook to direct your business and keep you focused - refer to it regularly
• Help you monitor your progress

What next?

See our Business Plan Content Checklists to find more about what to include in your plan. Our SWOT Analysis Template to help you prepare for writing your plan and our Cash Flow Guide and Template will help you with presenting financial information.

Disclaimer: We want to keep you in the know, so we offer a wide selection of useful resources. But Cultural Enterprise Office isn’t responsible for the advice and information of external organisations in this document. So if you have any questions, please contact the specific organisation directly.