You’ve got an idea and in your eyes it’s a good one and now it’s time to foray into the daunting world of compiling a business plan. Although a business plan can be daunting, they’re invariably the catalyst to success. Having a good business plan is absolutely vital to the development and survival of your business, here’s some tips on how to get that business plan right.
Research your market unbelievably well
I use the term ‘unbelievably’ not with a pinch of salt, but in literal terms, market research is absolutely fundamental to a business plans success. Research all the information about the market you’re about to enter in your business plan and show knowledge of opportunities, competition based threats and your USP’s.
Focus on the opportunity that your business has to offer investors
When seeking an investment through your business plan, it is unequivocally crucial that it contains why the opportunity is so beneficial for the prospective investor. What makes your business special? What’s so great about the business? What sets you apart from the competition? If your plan doesn’t answer these key questions, then you could be setting yourself up for failure.
Peter Hale, MCIM founder of Teneric, a company that provides resources to start-up companies said “It’s seen far too often that people rush their business plans and they skip over what should be seen as the most important aspect of the plan itself and that’s illustrating what exactly the opportunity is for a potential investor. Without this, the business plan is almost rendered utterly useless”.
Identify your competitors
This will tie in with research but because it is so important, I thought it best to give it its own mention. To understand the market you’re about to enter you must understand the competition. Who are they? What are their strengths and weaknesses? What is their direct impact on your business? Every single business has some form of competition and you should show a clear strategy for dealing with competitors in your market space.
Don’t compromise on detail
Your business plan should be to the point, but there’s got to be enough information and detail to ensure that whomever is reading it understands the business proposition. Your plan should indicate your professionalism and your ability to actually make the business work and that means detail – and lots of it.
Make sure you include all the facts, even if you think they’re not relevant
Your plan has to illustrate your products, services, competitors, customers, management team, financials, operations, development goals and strategy – so ensure you cover all of these. If you miss key facts, it’ll probably not reflect well on you, or the business proposition. Be meticulous.
Get your financials right
We’ve often seen beautifully crafted pitches on shows like Dragons Den that seems to crumble when interrogated on numbers. This part of your plan will always be the most heavily scrutinised and therefore, should be incredibly water-tight. Cash flow should be documented fully and your forecasts should be very well founded. Even though costs are easier to predict than sales, you must include both. If financials aren’t your thing, don’t worry, you’ll be able to find a plethora of experts that will help you by doing a simple Google search – and it’s well, well worth it.
Have a convincing excutive summary
Alongside financials, the executive summary is arguable the most important part of any good business plan. Some investors skip entire plans just to read the executive summary and if that doesn’t encapsulate them, then the battle is lost there and then.
An executive summary should include headline figures and condenses your entire business strategy and model into key points – which are simple to read. Although this part of a business plan appears at the front of a business plan, I advise you wait until finishing your plan and leaving this until last. Make it engaging and impressive, but do not go overboard as this can really put off prospective investors.
Get a second opinion
Once you’ve done the first draft of your plan it’s worthwhile seeking the eyes of a business advisor or someone independent for honest criticism. A great place to get assistance may be from your local chamber of commerce – so give them a try. Just as important it is actually doing your plan, it’s always important to get a second opinion, so I strongly advise you seek one.
Implement your plan properly
You’ve created a business plan for a reason – to make the business work. Within this plan you’ve laid out targets, marketing strategies and various other elements that will help reap the successes you’re looking for – so stick to it.
Often it’s seen that businesses deviate so much from their original plan that the plan becomes null and businesses lose direction. Keep that plan by your side to keep on track and work to what you’ve planned out – it’ll help pave the way to your success.