In terms of contact with the business world, the general public only sees the highlights. Yet, starting and running a business is very difficult, given that many businesses fail in their first few years.
The stakes can be high for owners, especially if they do not have any safety net, and bankruptcy can ruin them.
I know that history has successful companies that ran on the “ we’ll see how it goes” attitude. Of course, shooting from the hip and improvising as you go along won’t be an automatic death sentence for your company.
Still, you stand a much better chance of succeeding if you establish a solid business plan beforehand.
Taking a break from my regular topics such as “Is paperhelp Cheating” I decided to look at the top seven tips on creating an excellent business plan.
1. Be attentive and learn from others.
As a business owner, many other successful company owners came before you. Never hesitate to learn from their success and their failures. If you can get your hands on a printed version of their successful business plan, be sure to read it attentively.
Go through the plan and analyze its organization. Also, look for charts and examples while considering something similar for your project.
Don’t go into this with a chip on your shoulder, thinking that you must continuously innovate. There are proper business plan templates available. Use those, and sink most of your time into gathering intel.
2. Don’t be vague
Optimistic statements and projections are par for the course. However, a vague statement will just seem like an overly-optimistic jingle.
Be careful to measure every statement carefully and provide documentation for each mention. Even if you’re the boss, you have to be able to explain yourself always. Your investors and your clients will need convincing.
For example, if you aim to be a market leader, you must explain how you will reach that status. Mention sales forecasts, cash flow estimations, market interest, production costs, etc.
3. Research your competition and the local market
The market is supposed to provide competition, and this competition should drive innovation, better wages, lower prices, and so on. Yet, it has become a minor taboo to mention your competitors directly in your business plan.
You will never lead a market niche if you ignore your competition.
The only exception to this rule is those who genuinely establish their own niche via a unique invention. For all else, opposition research is vital.
The business plan should mention the industry’s overall status, the target customers, age ranges, geographic distribution, and other relevant factors.
4. Establish a TOC and keep it a secret
A table of contents will not only make it easier to structure your business plan, but it will also help you with organizing your thoughts.
Do not rush creating this critical outline, and mention every relevant topic: target demographic and market, financial stats, online and marketing outreach, etc.
In terms of legal coverage, you will need a few additions. When presenting your business plan to a bank representative or investor, have him sign a confidentiality agreement. In addition, you should also give him a disclaimer.
The disclaimer should make it clear that the business plan is a projected estimation. You do not want to be accused of misleading someone via an inaccurate business plan.
5. Research the people who will be presented with the plan
There’s a reason why commercials are getting shorter and shorter. Attention spans are generally low, and you only have a short window to capture someone’s attention.
Very few people are interested in browsing dozens of pages of your business plan. Of course, they will look at it eventually, once you pique their interest.
Yet, at first, a good businessman will seek to capture investors’ interest with a quick executive summary.
Usually, interested parties will read the entire executive summary, and then go to what interests them specifically in your business plan. The section depends on what catches their eye.
Knowing this pattern, you have to make the summary as informative and convincing as possible. Basically, it is an elevator pitch written down.
The plan and summary should be adapted to the person to whom it is being presented.
Will the meeting involve future partners, investors, loan agents, or board members? Simply knowing who they are will give you a lot of power.
Use your time to prepare for questions specific to each category’s interests. A loan agent may not be looking for the same things as a potential client or a board member.
6. Make the information easy to understand
In terms of your business plan’s readability, you should strive for a comfortable middle ground. Do not shy from mentioning niche details and jargon, but don’t overdo it. For example, an investor talking with a tech company owner will not necessarily grasp the product’s explanation.
Make heavy use of appendices and triple-check your grammar and spelling.
Graphical representations are used for a reason. They easily condense large chunks of information in a very understandable format. Pictures, pie charts, and graphs must be included in any business plan.
7. It’s better to have conservative estimations.
You need to impress people with your vision. Of course, instinct dictates that you want to put your best foot forward and estimate the best-case scenario. You will want to promise people the Moon so that you’ll get their approval or financial support.
However, it is said that a plan rarely survives contact with the enemy. The odds of meeting your highest quotas are minor.
Quoting best-case scenarios and projections will only lead you to disappoint those to whom you pitched your plan.
It is a much better strategy to make conservative estimations in market reach, profit margins, brand recognition, etc. If you surpass them, it will be more impressive.
It is a luxury to know that a challenge is coming around the corner. Use your time to prepare an excellent business plan by researching all aspects involved. It is not sufficient to include info about your business, but you must also be aware of the general market, your opposition, and the people that will read your plan.
When you account for all of these factors, it will be impossible not to write an excellent business plan.
My name is Laura C. Fields, and I am interested in education and its relation to the current job market.
While I mostly handle student issues like reviewing essay writing sites, I firmly believe that the learning process doesn’t end with graduation day.