A good business plan is vital for the success of every company – not just start-ups looking for financial help or investments. A business plan is essentially a road map for your business that helps you stay on track with your goals and have a structured strategy on how to achieve them.
And yes, business plans are not exactly something that happens overnight. It will require some effort as well as lots of research. Once you get it right though, it will serve as the secret ingredient to the growth and success of your business. To help you get started on yours, here are some tips on how to get the most out of your business plan:
Know your market
Before you can write about your brilliant business idea and how it will come together, you need to do your homework. Conducting comprehensive market research is one of the most important steps when writing a business plan.
This includes researching your competitors, target audience, the need for your product or service, anything related to the industry and market opportunities. Becoming an expert on the market that your business is entering will not only help you grow a successful business, but it will also show the reader that you’re an authority in the industry.
A great way to include some of your market insights without making it too long is by using marketing models. For instance, such models as SWOT or PESTLE can come in handy when explaining the trends, opportunities and threats of the market. Besides that, they can make your business plan look a lot more professional, which is also important.
Balance passion with evidence
Writing a business plan is essentially pitching your business idea to the reader — you have to explain exactly how your business will stand out in the market. Therefore, showing that you are passionate about the business and that you care is essential, as the reader needs to believe in you as well as your idea.
However, it is important to not go overboard with over-optimistic forecasts. You must remain realistic with your points. Your goals and objectives should be written in a SMART way (Specific, Measurable, Achievable, Realistic and Time-based). This is especially important when it comes to the financial part of the business plan, as this is the most formal and conservative section.
Leave no room for imagination
When proposing any operational or marketing strategies, make sure you are specific. This certainly doesn’t mean make it long or verbose, but try to hit all of the key points. For example, you need to explain exactly how your goals are going to be achieved. This means that if someone reads your business plan, they shouldn’t be left wondering how you will attract customers.
For example, writing about your marketing strategy should include the pricing strategy, the channels your business will communicate through, promotional techniques (such as content marketing or video advertising), what the brand identity looks like and how you will position yourself in the market. Infographics and good formatting is one way to contain this information in a small space.
Keep it concise and professional
It may seem like there is a book-worth of information to write about in your business plan, but you need to keep it concise. Ideally, your business plan will not be longer than two A4 sheets, and will include all the key information about your company. So, make sure that there is no irrelevant and excessive waffling. As touched on above, infographics and models not only keep things concise, but they’re much more digestible for the reader.
It may be tricky to stay within a certain word count with your business plan or give it a good structure. If you find yourself struggling with that, you can always use a pre-made template that will help you format the plan. Otherwise, including these main sections is a good rule of thumb:
- Executive summary – A short summary of your business and the report contents
- Company description – What the company does, its mission and vision
- Market research – Analysis of the market, competitors, audience
- The market – The target customers and their needs
- Marketing strategy – The way company will position itself in the market, pricing strategy, promotional methods, etc.
- Operations and management – Any possible legal requirements, management methods, equipment, suppliers, production, payment, staff and any other essential information.
- Financial forecast – The estimated sales, costs and cash flow of the company.
Although these are the most common points to include in your business plan, there are really no specific requirements for what has to be in it. You should structure your business plan based on who your reader is going to be — if you are trying to get an investment, your business plan should be centered around investability.
Crunch the numbers
Financial forecasting is one of the most important sections of a business plan and making sure that all the numbers stack up is critical for your success. A lot of start-up businesses tend to overestimate their sales revenue projections and underestimate the initial costs.
It is an easy mistake to make, but the outcomes may be harmful even for a profitable business. Wrong financial forecasts can quickly lead to a lack of cash and eventually insolvency. Therefore, you should take your sweet time with this section.
A common way to make financial forecasts is by using Excel Spreadsheets. Now, although this method can work perfectly fine, you need to keep in mind that it is easy to make mistakes with it. Simple formula errors can make the whole spreadsheet wrong.
Revisit your business plan
A lot of start-up businesses make the mistake of writing a great business plan and then forgetting it in the back drawers once the company is up and running. Your business plan is profoundly useful when treated as a living document and regularly revisited. It is a good idea to review it annually and update it for the upcoming year. This way it will serve as a map for your business- it will help you see if there is a better route for your company to take or perhaps if you need to divert to avoid a problem.
Writing a business plan can be tricky, and getting it right could be the difference between a loan approval or rejection.
Here at ASfB, we are always eager to discuss and review your business plan with you to ensure it best represents your company. If you would like to have a chat, call us on 01202 755600 or email email@example.com.