A business plan is an essential tool for any start-up. It serves two main functions. First, it helps you analyze your business idea and gives you ample chance to research it. Secondly, it is vital in helping you acquire financing for your start-up. Any serious investor will ask for a business plan, and you ought to always have one in hand.
If you have no idea how to create a business plan, here are a few crucial tips to guide you.
How To Create a Business Plan
Know Your Audience
The first step in creating the ideal business plan is to know who you are making it for. If your investor is a venture capitalist, present information in a way they will understand best. If you are looking for a loan from the bank, optimize your plan for a banker. If, on the other hand, your investor is an individual, find a way to make your idea appealing to them.
You may need to hire an accountant when creating your plan so they can arrange your finances in the standard business format. Sure, it will cost you some money, but it will prove worthwhile once the investor buys your idea.
When creating your business plan, a good rule of thumb is to present your idea clearly and concisely. Avoid gimmicks by all means. Focus, instead, on showing your investors how and when they will get back their money. This is the thing they care about the most.
Research, Research, Research
Research is the foundation of any great business plan. Whenever you make your claim in your business plan, be sure to support it with a fact. The fact could be a statistic or a quote from a leader in the industry you want to enter. And the only way you will find such pertinent information is through thorough research.
In your plan, be sure to include plenty of information about your competition. Who are they? What position do they occupy in the market? Why do they have market dominance, or why are they unnoticeable? What sets your service or product apart from theirs? Is the expectation of your uniqueness realistic? These are just some of the questions you have to answer.
You also ought to take time to research your team members. Start by confirming that they possess the qualities and skills they claim to have. You can do this by contacting their references and enquiring about them.
When drafting your business plan, the temptation to paint your idea in rosy terms and stress your faith in your start-up can be overwhelming. However, you need to exercise cautious optimism and set achievable goals.
If you think you will start earning profit in three months, first reflect on this belief’s practicality. Do other businesses in your field, such as the live chat answering service, start making a profit that soon? If not, there is a chance yours won’t either.
If you expect to be making a lot of money within the first year of business, indicate half of that amount in your plan. This is crucial because the business world is relatively unpredictable, and you may encounter challenges you couldn’t foresee along the way.
Any worthwhile business plan is built on three pillars: knowledge of the audience, extensive research, and cautious optimism. If you want to win over investors, try these tips, and you will stand a better chance of selling your idea.