The starting point to launching any successful new-start up is the business plan. Writing it can seem a daunting task but it is a vital component to securing financial support or investment.
It’s also crucial to your business succeeding and developing. We’ve put together our top 14 tips to guide you through every step.
1. Taylor to your audience
A good place to start. All the content you include in your business plan should be with the reader in mind, you should be aware of who is going to read it. Often you should be prepared to create more than one version depending on who the audience is.
For example, any potential investor is only interested in how and when they will get a good return on any investment. A bank manager is only interested in ensuring you will be able to pay back a loan.
2. Identify your competitors
All businesses have competition and it’s key you have taken the time to identify them in your business plan. You should be thinking about who they are, what they do well, where they go wrong and what this means to your business.
3. Know your market
Any successful business owner is aware of all the threats and opportunities in their market. All market information should be included in detail within your business plan, clearing showing your research and understanding of your chosen market.
4. Don’t miss any important details
Your business plan should present the reader with all the details they need to fully understand your business, while also remaining clear and concise. Your business plan is often a potential investors first impression of you as a person so ensure there are no spelling mistakes, errors or fanciful figures.
5. Double & Triple check your financial details
Your financial forecasts will probably face the most scrutiny. Your cash flow should be complete and fully documented, and your sales predictions should be well justified.
It is not unusual for people to seek professional advice at this point, especially if they have no prior experience of what is expected.
6. Write the very best executive summary
In many cases your executive summary will be the most important part of your business plan. Depending on the audience this may well be the first thing they read so it should be engaging and include all your key facts. If the reader is not encouraged to read on, they may well lose interest.
An executive summary should include your key figures and summarise your business strategy. Although it should be at the front of your business plan, you should delay writing it until last once you have your final facts and figures to hand.
7. Don’t include unsubstantiated facts
Many new entrepreneurs are great at discussing their fantastic idea and cool marketing activities but forget to back these with any sort of operating budget or market limitations.
Stating you are a leading expert, or that your business will be the market leader in 12 months is great but be sure you can support bold statements with hard facts.
8. Be honest about risks
Launching any business or new venture has risks and your business plan should provide an honest assessment of each. If your business plan only includes your strengths and grand predictions, it will give the impression you haven’t fully researched your market. The result will be you won’t get the funding or investment you’re looking for.
9. Include an experienced management team
Having a great team around you not only introduces a more professional image, but working with experienced people will significantly increase the chance of your business succeeding.
10. Include future plans – do you have an exit strategy?
If your business plan is designed to attract external investment, you will need to show how investors make money. Including a clear business model is not enough if it does not include exactly how investors will get their money back, plus a good return on their investment.
11. Write it for a human to read, not a machine
Obviously it is vital to include key financial information and market analysis but always keep in mind you need to keep the reader interested. It should be easy to understand as well as well written.
For many investors they will want to know about you and what drives you to start your business. This is another great way to show you are both driven and trustworthy. If writing is not one of your strong points perhaps consider hiring a professional to give your plan a creative edge.
12. When complete, go back and review your financial variables
Now you’ve completed your shiny new business plan, go back and review the financial information and forecasts you’ve provided. If you’ve added any additional requirements you will need to ensure you have allocated your budget accordingly.
13. Ask people to read it
Once complete ask people to read it who have no prior knowledge or interest in your business idea. Ideally you should look for someone with experience, but as with any writing, a fresh mind is key to spotting mistakes and providing honest critic.
Ask your readers to ask even the simplest questions if they don’t understand something. This will not only ensure your business plan is easy to read but it may lead onto to you spotting something far bigger.
14. Keep it up to date
Like your business, your business plan should constantly evolve. It’s a great tool to bench mark your successes (and failures) against, while also being key to your business operations.