Any company seeking investment from a third party will undoubtedly be required to provide a formal business plan. Even if your company is being funded by a fairy godmother, there are various additional reasons to use this vital tool.
The act of preparing a business plan can assist you in defining the type of company you are forming as well as focusing on the objectives that must be met if you are to succeed. It’s useful for keeping track of your progress, strategizing a marketing strategy, and hiring experts for certain roles within the organization. A strong business plan is more than a description of who you are and what you do; it is a strategy for planning the future of your company. Having this certificate also distinguishes the pros from the amateurs.
You’re undoubtedly used to taking chances, making judgments based on intuition, and sealing transactions with a handshake as an entrepreneur. These are certainly useful talents, but according to a survey conducted by PricewaterhouseCoopers, two-thirds of fast-growing businesses rely on business plans. You may succeed without a business strategy, but your odds of continuing to grow are small. It is critical to plan for the expansion of your company.
In the end, a business plan is a technique to thoroughly comprehend all parts of your company. So here are ten unbreakable business plan writing rules:
- Use clear, succinct and detailed content while drafting a business plan.
Trying to read through poorly written content is one of the most irritating experiences one can have. If you’re not a natural writer, employ a professional business writer to help you put your ideas on paper and make them stand out. From the cover page to the appendix, make sure your strategy is clear, succinct, and detailed—and that it isn’t more than 20 pages long. Future investors, partners, or employees who read your plan will be seeking for specific information, so make it simple for them to comprehend.
- Use your executive summary to entice your business plan.
The executive summary clearly states what your company does and what you desire, and if it does not impress investors, they will stop reading. It’s that critical. Investors want to know why your company is different, so you must convince them that it will succeed where others have failed. Make it simple for them to believe in your company’s success, but keep your justifications brief and to-the-point—no more than one page. An executive summary should also include your financial estimates and the amount of money you’re attempting to raise.
- Identify your target market with precision.
Contrary to popular belief, your target market does not include everyone. Every business caters to a specific group of people, such as new mothers, coffee drinkers, people in a certain financial range, and so on. This is where you can show off your incredible research abilities and industry knowledge. The majority of market data can be obtained via your local chamber of commerce, census statistics, other business owners, and trade groups. Keep note of your sources so that you can back up your assertions.
Define the market by providing details on its size, potential for growth, anticipated sales, and trends. This is where you’ll explain your price and marketing approach, as well as how you expect to compete.
The following questions should be addressed in your market analysis:
- What is the size of your target market?
- What is the rate of growth in that market?
- What are the finest places to look for opportunities?
- Who are your main rivals?
- What exactly do they sell, to whom do they sell it, and how well do they sell it?
- Why should clients choose you above your rivals?
- Present your company with detail overview
Use this part to provide a profile of your firm, such as when it was founded, where it is situated, and which legal business structure you have selected, whether you call it a “Business Description” or a “Company Overview.” This is a wonderful spot to talk about your firm’s success or, if the company is new, your or your partners’ previous achievements.
According to the Small Business Administration, you should include specific customers, organizations, and other businesses that your company presently services or will serve. Use this section to showcase any competitive advantages your company may have, such as operating an ice cream shop directly across from a large sports complex.
- Don’t be afraid to congratulate your leadership team.
Consider this section to be an online dating profile!
When it comes down to it, investors prefer to invest in people rather than ideas. This is the segment in which you sell the people who will operate the company. Describe each of the founders, business partners, or officers’ skill set, why they are qualified, and any successes or connections they can provide to the organization in a profile. Consider this section to be similar to an online dating profile: you want the readers to fall in love with these folks right away. Individual resumes should be included in the appendix.
- Be aggressive when demonstrating your marketing strategy
This is your company’s driving force. You can have the best business in the world, but without strong marketing, you won’t have any clients, and you won’t have any business. This area of your business plan contains information about your marketing strategy and the outlets you’ll use to promote your company. Will you utilize direct mail, emails, newspaper ads, or online ads, for example? Are you going to perform your own marketing or engage a marketing business to do it for you? It is an irrefutable reality that organizations with the finest marketing plans are more likely to succeed than those with the best products.
- Emphasize the benefits of your products and services rather than the features.
You’ve spent a lot of time discussing your company and target market, but don’t forget to include specific information about your product or service. What exactly are you trying to sell? You’re offering a solution in addition to the obvious concrete product. This explanation should focus on the benefits after you’ve explained the features.
A feature is a property of a product that describes what it accomplishes. A benefit is the benefit that your product or service will provide to your customer, or the value that it will contribute to their lives. A smartphone’s functions might include a music player, GPS, and camera, for example. Customers will appreciate how convenient it is, how much room it saves, and how well it organizes their lives. In other words, how the customer is going to be benefitted?
- Demonstrate that your operation plan is serious and business oriented.
This section provides an overview of the capital and expenses required to run your business on a daily basis, such as location, equipment, inventory, and vendors. It should show the steps you’ve made so far to get your business ready (demonstrating that you know how to manage this specific business), as well as the milestones you anticipate to hit each year over the following 3-5 years and how you plan to get there. By effectively laying out this information, you will demonstrate that you are familiar with your industry’s norms and laws.
- Respond to the crucial questions of benefits for investors
If your company plan is created to entice potential investors, the first thing they’ll ask is, “How would I earn from investing?” You don’t need a page after page of reasons why your company will be successful. Simply mention the characteristics that matter, such as cutting-edge equipment, a prime location, a low cost of doing business, a one-of-a-kind product, or a management team with a proven track record of success. As you draught the business plan, keep an investor’s perspective in mind to anticipate and answer all of the questions that will inevitably arise.
- Include an appendix to provide more support to your business plan.
Consider the appendix as a backbone for the rest of the business plan. This is where you put anything that supports what you’ve written in the plan. Full financial projections, including balance sheets, income statements, and cash flow statements, are required. Include important personnel’s resumes, as well as any patent information, customer lists, and supplier information.
To write a business plan, first think about what you want to do. Repeat the process of shininess, buffing, polishing, and polishing.
A strong company plan isn’t one-dimensional. That is to say, it will develop and alter in tandem with your company. You will learn more and alter your company plan as you achieve or fail to achieve your objectives. Every three months, you should revise your strategy.
It’s normal for your first draught to be lengthy and overly wordy. Get a second set of eyes to look over it and provide input, removing anything that doesn’t clearly address the question, “What makes this business unique, and how will it be profitable?”
When it comes to your finalized business plan, the old saying “you only get one chance to make a first impression” could not be truer. Fortunately, when writing a document, you get to go through a lot of revisions before making your “first impression”!