Starting a business during an economic downturn
Business plans in an economic downturn
You need to decide what legal structure will best suit your business in difficult economic times. Carefully consider the advantages and disadvantages of each option because the structure will affect:
- the tax and National Insurance you have to pay
- the records and accounts you have to keep
- the way management decisions are made
Some of the business structure options are:
- sole trader
- limited liability company
- limited liability partnership
- social enterprise
To see which structure would best suit your business, see legal structures for business: an overview.
Creating a business plan for an economic downturn
A business plan describes the business' objectives, its strategies, the market it is in and its financial forecasts. A good business plan is particularly important when starting a business during tough economic times.
Going through the process of writing the plan should focus your mind on everything from where the business will be based to where you are going to find your first customer.
It is also a blueprint for the future development of the business that potential investors will want to read before they lend to you.
Your business plan should include:
- an executive summary
- a description of the business
- a marketing and sales strategy
- information on your operations, including your business premises, your IT and management information systems
- financial forecasts
You should ‘price-in’ the effects of the economic slowdown to show how your business model can be successful.
For more guidance see how to write a business plan: step-by-step.
After the business plan, you should consider writing a marketing plan, which sets out how you will target and interest potential customers in your product or service - see how to write a marketing plan.