Become the best of business plan builders.
Do you clam up the second someone states that you need to make a business plan prior to being able to make your entrepreneurial dreams and efforts come true? For a few, they view it as something that simply takes too much time and energy and end up being a deal breaker.
However, it truly isn’t that difficult if you know the best way to go about it.
In The Secrets to Writing a Successful Business Plan, we’ll bring you right down to the heart of the problem- how come business plans are so very important, how you can steer clear of typical mistakes made with style and content, as well as how to successfully make them.
You will find out
- When’s the best time to create a business plan that resembles a 30-page roadmap and when it’s not necessary;
- How come you need to pay a little more attention to the executive summary; as well as
- What are the three fundamental statements have you to have in your business plan.
A business plan is a multi-purpose tool for refining any idea.
The majority of people are aware of the concept of a business plan, but they don’t actually know much about them. Therefore, what really are the tools of entrepreneurship?
A business plan is essentially a concise outline that describes the elementary parts of a future business. There are some things that companies need to make sure they think about before they get together to create the business plan. First things first, though, you need to know when you actually need one.
For example, suppose you are in the midst of making a new company, such as opening up a hair salon, purchasing a current motorcycle shop, and creating a start-up from your very own idea. Each one of these needs a business plan that outlines how the operations will happen.
However, what exactly does a business plan actually do?
It basically assists with the structure of what you’re trying to do, verify that it can be done, as well as add up the figures on its potential profits. Therefore, a business plan is so much more than a simple formal, administrative document. Indeed, creating one is a creative process that assists you with organizing your business idea.
This process of thinking will help you figure out the chances for you to succeed are and if your idea makes financial sense. In addition, through your business plan you’ll create reachable goals, go through the benchmarks, as well as put any last minute touches on your idea. Doing this is crucial as the amount of time that you put into it will help you pinpoint and thus steer clear of any possible problems which helps increase the chance of you succeeding.
Lastly, it’s crucial that you distinctly declare your value proposition which is basically an elevator pitch. In other words, suppose you go into an elevator that Mark Zuckerberg is also currently taking. You have 15 seconds to get him to like your idea by answering questions such as,”what problems are you solving?”, “in what way are you better than your competition?” as well as “why would you be able to succeed despite the fact that others have failed?”
Avoid common mistakes to draft an appealing business plan.
Prior to getting into the deep part of the business plan, it’s beneficial to talk about possible deal-breaking mistakes and figure out how to stay away from them, especially when you need to find funding.
First things first, being precise is key, especially when it comes to pinpointing who your competitors are. As a result, you have to be precise and outline what it is that you are planning to do. Therefore, although it is fun to talk about your ideas with others, your business plan needs to mention actual problems such as financing, product development, distribution, as well as branding, along with many others.
It’s also smart to practice pinpointing your rivals. I not, your possible funders will look at you and think that you don’t have solid insight into your business and thus, they wouldn’t want to invest in you. Therefore, don’t forget that each business has got some competition.
However, you will also have to have an answer to, “how will your company be able to make money?” If your strategy is one that focuses too much on creating the business right now while you then worry about the money later on, your business plan won’t find too much support.
Next, you need to include short biographies of your main staff. Don’t forget that when selecting investments, funders are placing their faith in both the entrepreneur and their time. As a result, it’s crucial that you make your investors comfortable with both yourself and those that are working with you.
It’s just as important to make sure that the money that you would like to have lines up with your needs. For example, if you ask for a $100,000 loan, the investor will want to have a good understanding as to how every penny will be spent; if it will go towards inventory, equipment, or salaries. Therefore, if you are able to only account for $50,000 out of the $100,000, you won’t look reliable and thus, have a much smaller chance of getting financial help.
Lastly, you have to be consistent as general consistency portrays a strong message that helps convince investors that your idea is valid. As a result, it’s risky to outsource pieces of your business plan. This is due to the fact that you may only end up with a halfway connected document. For instance, if you are able to create a solid sales forecast, but then ask a consultant to outline the marketing plan on their own, there’s a big chance that the numbers won’t line up.
First things first: feasibility plan, feedback, family finances.
Now that you are aware of the most typical mistakes made, let’s take a look at the strategies that you can use to create a solid business plan. Begin by creating a feasible plan, a tool that questions your presumptions.
This five page document needs to go over the main parts of your plan: the business idea, your key asset against the competition, a description of your target customer, and a bit of text about the everyday operations. You also need to add some numbers that will outline your possible cash flows.
Essentially, by taking a look at a feasibility plan, you should be able to figure out right away if your idea is good enough to go forward with it or if your first thoughts about the business idea were too lax or ignorant.
As soon as you’ve got a solid feasibility plan and think that your idea is a solid one, you can go forward and tell both your mentors and advisors about it. Here, you want to talk about your mission with experts that are objective and yet you trust them at the same time to get good feedback. This is a really good way to continue to confront the validity of your feasibility plan. Therefore, if you ask your family or friends, they will most likely be quick to give you very positive words of praise and therefore, you won’t get objective feedback on things that actually matter the most.
Therefore, if you are able to, start off your company with the help of your own financial resources or your family’s.
This is due to the fact that half of all of the up and coming startups fail within the initial five years. If your business ends up being one of them then it would be much better for you if you had borrowed money from your grandmother rather than from the bank.
Now that we’ve gone over all of the basics, it is now time to go over what lies at the heart of a business plan.
The first part of your business plan is also the most important.
It’s not new to us that we shouldn’t judge a book based on its cover, however, in terms of business plans, the opening part of it can either make or end the deal. This part is called the executive summary and it’s a crucial part.
This is due to the fact that this is the part that your readers may actually only take a look at. Indeed, bankers and investors are quite by and typically have piles upon piles of business plans that they have to go through. Since they’ve only got a certain amount of hours to go through all of them, there isn’t a big chance of them reading more than the first couple of pages of your plan should your story not captivate them.
However, what is an executive summary?
This is an outline of your complete business plan which needs to be consistent with each thing that follows suit. Therefore, in the initial paragraph, describe the issue that you are planning on solving for your customers and how your solution is different to that of other companies. Afterward, in the marketing paragraph, outline how your target is, the amount that you are planning on selling, and who your competitors are.
The next section needs to be short and concise with a focus on who you are working with. Outline all of your previous experiences and industry knowledge. In the last paragraph, you need to describe our finances via main figures such as what your forecasted income will be throughout the following three years. You should also detail the amount of money that you’ll need to get started and then divide that number between the amount that you are placing along with the amount you’ll need to get from investors outside of the company.
However, don’t forget to keep in concise at a maximum of two pages. Even though the executive summary is the very first section in your business plan, it’s better to write it at the end. This way, you’ll do a much better job with it as you have already drafted the rest of the plan, so you know just what your project is about.
A strong business plan gives detailed descriptions of the concept, operations and team.
You may have been working on something for many years and have taken things surrounding it for granted, but everything is new to everyone who reads your business plan, therefore, you need to be clear when it comes presenting your ideas distinctly.
At the beginning, you need to describe either your item or service, the channels that it will be distributed through along with any of your competition. In regards to the item, instinctively the readers would want out to clearly paint a picture of how it all works. For instance, if you created a new kind of electric engine, investors would want like to see the device’s technical information.
However, your distribution channels are just as crucial since regardless of whether you want to sell your item on the Internet, through retailers, or via the wholesale market, it’s important that you elaborate on why the decision that they made is the best one for their company.
In addition, it’s best that you talk about your competitive advantages. For instance, if you are local then you have a lot of insider knowledge of a certain market or lots of experience in your specific field.
Afterward, you need to describe each detail inside of the operations starting from your production methods all the way to your schedule. Those who will read it will want some information on your everyday business routine and everything else that follow including the location, your working hours, as well as the equipment that you need to use. Your supplier, for instance, could be on the other half of the world. In this instance, it would be crucial for you to outline how each of you will be able to work together despite the distance.
You should also outline any possible legal issues that may arise. For example, when you open a bar, people typically need to get a liquor license.
Lastly, you need to do team introductions as your investors will want to have a good idea of who they will be paying with their own money. Therefore, if you put your whole family on the payroll, some eyebrows will definitely be raised.
Therefore, you want to make it clear by answering these specific questions: “Will you be working in a team or on your own?”, “Would you like to hire staff on a contractual basis?”, and “Do your employees have the proper expertise?”
You must detail your strategy and path to success.
As soon as you’ve laid out all of this data, you will need to share your business strategy along with your plan as to how you will reach your goal. In order to do so, you’ll need to break it down into three pieces.
First of all, you want to make sure you have a market analysis that’s the size of the market and that shows that there are enough customers in it in order for your idea to be profitable.
Afterward, you can outline your perfect customer, which is an important step when you’re trying to figure out how to reach out to them. For example, if you have invented a new website similar to Facebook, but for dogs, you will most likely go after pet lovers that are aged between 15 and 40 that are interested in the new technology.
Next, you want to make a competitive analysis. If you are similar to that of any other normal startup entrepreneur, you most likely think that your concept is so different to that of others that no other rival can even come close to you. However, that actually never ends up being the case.
Therefore, a competition analysis is imperative so that you can let your readers know that you have realistically assessed the conditions of the market. Inside of that analysis, you want to pinpoint around five of your main competitors as well as their main strengths and weaknesses. For example, this may be with regards to their marketing strategies, their policy for delivery, or when they are open.
Afterward, you can attempt to figure out how your rivals will react when you come into the market. For example, will they end up cutting their prices, stealing your concepts, or potentially boosting the amount of aggressive advertising that they use?
Lastly, you need to provide certain marketing strategies. There are many to choose from today, including email marketing, press and the media, Internet advertisements, blogs, and so many others. In order to figure out which one is the best one for you, make sure that you monitor the cost of each one along with the possible advantages that they offer. It will be straightforward figuring out which one makes you the most money!