Valuable Tips For Writing A Solid Business Plan
- Conduct A Ton Of Research
It is incredibly important to both research and analyze your product/service, your market, and your objective expertise. A good rule of thumb is to spend twice as much time conducting research, evaluating facts and figures, and thinking things through as you do actually writing the business plan. In order to write a solid business plan, you must know your company, product or service, competition, and the market on a thorough basis. In essence, it is your responsibility to know everything possible about your business and the industry that you are either entering into or are currently involved with. Read anything and everything you can, and talk to as many people as possible.
- Establish The Principle Of Your Plan
By definition, a business plan is a "written document that describes the nature of the business, the sales and marketing strategy, and the financial background, and contains a projected profit and loss statement." That being stated, your business plan actually serves multiple uses. For example, a business plan can and should be utilized as an overall plan that offers directions for a business to plan its future. It should also help the company avoid and or overcome any potential bumps in the road.
This is an important factor to consider, especially if you are self-funding the business. However, if you want to obtain financing or attract investors, your business plan will have a different intention. You will need to write it in a manner that targets banks and investors. That means it should be both clear and to the point. When you take the time to actually define your business plan, ensure that you have also defined these goals.
- Create A Profile For Your Business
Your business profile should include the history of your company, the products and or services that you offer, your target audience and market, your resources on hand, and how you plan to solve problems. The profile should also include some facts that are related to what makes your business unique. Company profiles are typically located on the business's official website and are used to provide information to both customers and potential employees. You can use that profile, or an enhanced version to describe your organization in the business plan.
Your company profile is an important piece of the business plan, and a good place to start, as it is included in one of the first sections of the document. When you have your business profile already in place, it makes this step considerably easier to write.
- Document Each And Every Characteristic Of Your Company
Banks and lenders want to ensure that the business has or will have the ability to pay them back. Investors want to make sure that your business is going to actually make them money. Due to this fact, banks and investors want to know as much as possible about your business and how it functions or plans to function. That means you need to document everything including the cash flow, expenses, and industry-based projections in order to keep them interested. Always include the seemingly minor details such as licensing agreements and your location strategy to name a few.
- Have A Strategic Marketing Plan On Hand
A solid business plan should always include a strategic marketing plan that balances the fine line of being aggressive without appearing to be overly aggressive. Your marketing plan should include exactly how you plan to achieve your marketing objectives. In essence, it should spell out exactly how you plan to introduce new products/services, extend or regain markets for existing products/services, and how you are going to enter into new territories for the company.
The marketing plan should also include exactly how you plan to boost sales of a specific product, service, market, or price range. Where will this business come from? You need to be specific here. Other items to consider are how will your company cross-sell or bundle one product or service with another, how will you enter into long term contracts with clients, and can you raise prices without cutting into sales figures? Other questions that you need to answer are how will you refine products/services, what is your content marketing strategy, and how will you enhance manufacturing/product delivery.
Keep in mind that each marketing objective should have multiple goals in the form of subsets of objectives. You also need to think about and list specific tactics for achieving those goals. Focus on the what and why in the objective section of your marketing plan. This should include information regarding the marketing tasks for the year ahead. The implementation section should focus on the practical areas of the who, what, where, when, and how.
In essence, this area should explain how dirty work is going to get done. It goes without saying that achieving your marketing objectives will cost money. That means your marketing plan must include a section on exactly how you plan to allocate budgets and funds for each marketing activity that you have planned. You will certainly benefit from creating separate budgets for internal staff time hours, and external out of pocket expenses.
- Your Business Plan Should Be Flexible Based On The Audience
There will be various people that read your business plan. They can range from bankers and potential investors to employees and customers. This may be a diverse group, but it is also a finite one. Each reader will have particular interests. That means if you know these interests upfront, you can actually take them into account when preparing your business plan for that particular audience. In essence, you may have multiple versions of the plan to show to different audiences.
For example, banks will typically be far more interested in balance sheets and cash flow statements, while investors will be paying more attention to the business concept and your management team. Executives or managers on your team will utilize the business plan in order to remind themselves of the company objectives. The bottom line here is that your business plan should have the flexibility to be modified depending on the audience that is reading it. That being stated, these modifications should be limited from one version to another. For example, when sharing financial-based data, the projections should be the same across the board.
- Explain Exactly Why You Care About The Business
Your business plan needs to show that you are passionate about the company, and dedicated to the cause. This message should be obvious in every version that you show to a particular audience. That means you need to explain exactly why you care about your business, your business plan, and what you can accomplish. You should discuss the mistakes that you have made in the past, and the lessons that you have learned from those mistakes. Make a list of the problems that you are trying to solve by being in business.
Describe your values, and absolutely ascertain what it is that makes you stand out from your competition. It is perfectly fine to come across as if you are setting out to conquer the world so to speak. What is it about your products and or services that make it easier for people to either live their lives or conduct business? It is imperative to ensure that your passion shows through in everything that you do. Explaining why you care about your business creates an emotional connection with your audience. It certainly goes a long way in providing them with yet another reason to support your business moving forward.
- Do Not Be Overly Optimistic With Your Projected Sales Figures
If you are applying for a business loan, the bank or lending institution will typically have first-hand knowledge regarding your target market. That means if you provide sales estimates that may be on the high side, it will hurt your chances of having the loan approved. In a plethora of cases, it can even kill the deal. The same holds true for local investors that are familiar with your target market. Banks and educated investors know what you can expect sales to be for the type of business that you are starting or expanding.
For example, if you walk into the meeting/presentation with a projected sales forecast that is 75% higher than other businesses within your industry, they will know that you have made a large mistake with your calculations, or simply are not facing reality. Either way, it will significantly reduce your chances of obtaining financing or investors. Banks will not lend money, and investors will not invest in companies that they do not believe in.
- Write Your Business Plan In A Short And Simple Manner
Your business plan obviously needs to cover all of the important areas in detail. However, none of the sections should be drawn out. You certainly do not want to come across as long-winded. A good rule of thumb is to cover all sections within 15 to 25 pages. That way you will be providing the proper amount of information without over doing it. Anything longer may very well bore your audience, which is never a good thing. A solid business plan should be clear, concise, and contain all of the relevant information while holding your audience's attention.
Focus on the strategic aspects of your business plan, and avoid getting too bogged down by the technical components of your company. For example, do not use too much industry jargon. Keep in mind that you can always include important information and other supporting details in the appendix section.
- Proof Read The Document Multiple Times
A lot of people that will be reading your business plan pay attention to the details. That means grammatical errors, punctuation blunders, and spelling mistakes may very well jump right off of the page. This is can be a huge turnoff for lenders, potential investors, and even prospective customers. In essence, they will focus on your mistakes instead of your business.
Readers may even doubt your ability to run the company. For example, if you fail to properly proofread something as important as your business plan, they may very well believe that you are not detailed oriented enough to be the boss of your own business. By proofreading the document multiple times, you are sure to catch any mistakes.