Writing a business plan can be a daunting taks for many business owners. This article provides some basic tips to make the development of your business plan a little bit easier. It will also ensure that your business plan will be effective in achieving your goals.
1. PLAN AHEAD
The mistake most business owners make when writing a business plan is to rush the development of the document. Procrastination is the number one killer of a well developed business plan. You will not be able to develop a well thought-out document if you wait until the day before your meeting with the potential investors. Develop a plan before you need it and keep it up-to-date with regular reviews.
2. DO YOUR RESEARCH
Market research, business intelligence and SWOT analyses need to be performed if you want to be successful with your business plan. Be prepared to answer questions on how big your market is, who your target market is, what consumers are looking for when they are dealing with you, how much consumers are willing to pay for your product or service, and who else is offering similar products or services. You will not be able to answer these kinds of questions without properly researching your market through the Internet, industry organizations or phone calls.
3. DIFFERENTIATE YOURSELF
After you have done your research, you need to differentiate your business, product and service. Investors are not interested in putting their money into Me-Too organizations who have nothing different to offer than an already well established competitor. Lack of differentiation leads to price competition and eroding margins, making it more difficult for investors to achieve a positive return on their investment. When differentiating your product or service, make sure you are differentiating yourself with valuable arguments that your customers care about.
4. KEEP IT REAL
A major part of your business plan is your sales forecast and other financial projections. When developing your projections make sure they are as realistic as they can be. A conservative forecast backed up with a detailed plan on how you can achieve these numbers is more valuable to investors than a pie-in-the-sky projection that lacks any footing in reality. When you develop sales figures, translate them into the number of customers you need and explain where these customers will come from. In other words Your Marketing Plan should back up your sales forecast.
5. THE HEART OF YOUR PLAN: EXECUTIVE SUMMARY
After you have written all your essential parts of the business plan, set aside sufficient time to write an executive summary that crystallizes all the essential elements of your plan. Put yourself in the shoes of your investors. They review dozens of plans every day and most likely only read executive summaries. It is absolute key for you to grab your reader's attention with the executive summary.
