Business plans: tips for arts, culture and the creative industries
Before you think business plan, think business model
A business plan is a smart and sassy document you write for investors, lenders or potential partners to give them an understanding of your business, so they can make a decision to support it. A business model, on the other hand, is the practical understanding of how it will work. The School for Creative Startups has developed some key questions that will help you create your own:
- The proposition: What do you do that people want? How do you know that your product is answering a need or fulfilling a desire?
- The customer and market: Who are your customers and where do you find them? What are their attributes and what are your market segments?
- The competition: Who are you up against and what can you learn from them?
- The industry: What do you have in common with your competition? Which trends are impacting your industry? How can you predict future trends?
- The channel: What are the different routes to finding customers?
- The relationship: What financial relationship do you have with your customers? Do you want to sell your product by subscription, via a payment plan or as a product people buy at a fixed price?
- The pricing model: How much should you charge for your product or service? What are your customers willing to pay? What are the other business costs to factor into your pricing model?
- The key partner: Who is your key partner? How can suppliers, distributors and marketing companies become one? Who can you bring on board to help you deliver your product or service?
- The asset: What is you key asset? What do you have to your advantage, to help you win customers? Is it physical, intellectual, human or financial?
- The key competency: What activities must your business be good at in order to prosper? What skills and experience do you bring to the business?
Pip Jamieson, founder and CEO, The Dots
Getting your team excited about the business plan is key to its success. Before getting into the detail, a great first step is to spend an afternoon with the team and key stakeholders to work on the business model canvas: a useful visual collaboration tool that helps teams understand at a much deeper level the business’ relationship with customers, distribution channels, partners, revenue streams, costs and its core value proposition. This will help you consolidate your thinking before diving into the detail of the plan.
Keeping it visual can help
My first business plan was a whopping 54-page word document, which was a big mistake. If you can’t articulate your plan over 10 to 15 well-designed presentation slides, you will lose your audience. The key is getting the structure right from the get go, with a slide for each key component of your plan including business overview, target market, unique selling point (USP), market conditions, marketing plan, competitor analysis and so on. Keep text to a minimum and use graphs and visuals to explain some of the trickier bits. A good rule of thumb is that if someone can flick through your business plan in 10 minutes and get it, you’ve done a cracking job.
Andrew Harding, managing director, CIMA
Structure your plan
A challenge for anyone who is passionate about their business is to explain it in terms others can understand. A structured way of doing this is to articulate your business model in terms that lead to financial outcomes.
Start with your customers or the market segments you serve. Explain what assets, resources and relationships you have (or need) to serve them. Next, outline the processes and intangibles (specialist knowledge, skills, reputation etc) that enable you to meet customer needs competitively. Finally, you can explain what costs you will have and how you will generate income. Thinking about your business in this way will help you identify how to manage its performance and what strategies you will need to develop your business model. A business plan is simply a means of telling this story.
Sarah Wood, co-founder and COO, Unruly
Remember that the point of the plan is to help you and your team focus. It should be an operational plan of action, not a bunch of theoretical concepts, notional market sizes and fanciful financial projections.
The people who you put in the plan are more important than the numbers you submit: who will you hire, when will you hire them and how will their success be measured? What alliances and partnerships beyond employees do you need to succeed? Although it’s good to be ambitious, the most useful business plans don’t look five or three years ahead. Things change too quickly for that to be much use. You want to have an agile, flexible mindset and a business plan to match so you can change direction if necessary.
Stuart Rock, editor-in-chief, Business is GREAT
Sift, aggregate and test
Don’t just read one guide to writing a business plan; sift and aggregate the advice from several. None of them will provide you with passion, creativity and vision – that’s down to you – but you’ll have the all-important structure of a valuable business plan. Then test it with that most important constituency: the people who you believe will buy from you. Also, test it with someone who you can trust to be objective. Your plan will rarely survive contact with reality, but it’s a challenging process and an important discipline.
Scott Phillips, founder, Rise Art
Revisit your plan
We continue to iterate and improve on our business plan each quarter. I’m constantly looking at the latest research and speaking with our customers to see how we are doing in the real world. Our business plan always changes based on what we’ve seen that has worked and what’s not. We revisit it and modify the assumptions accordingly. Setting the business plan and agreeing regularly on the key indicators with the team also helps keep everyone honest. We know what is working and what is not, and we can measure our success or lack thereof accordingly. We also know where we need to focus our energy.
A really handy way to see if your product resonates with customers is to routinely survey your customers and establish net promoters scores. You’ll see how over time customers view and will recommend your brand.
Bernadine Bröcker, CEO, Vastari
A business model isn’t just a box-ticking exercise
It needs to ooze passion, drive, inspiration, as well as ticking the boxes. Make sure you think of all commercial and strategic angles, but also make sure that any potential investor or partner can also read how inspired you are in making this business a reality.