Why a business plan is essential
The journey to launching your own new business can be challenging and confusing. Where do you start? In a regular series of articles for Business Leader, Brendan Beeken, entrepreneur and investor, shares advice based on his personal experience of success and failure in business.
A business plan is a crucial strategic tool for entrepreneurs. A solid business plan not only assists entrepreneurs in focusing on the particular procedures required for their business ideas to succeed. It also helps them achieve short and long-term goals.
While a business plan is necessary for entrepreneurship, not every entrepreneur sees the value in having one. Often, people are hesitant to write down their plans, and several online articles suggest that the business plan is dead or outdated.
Of course, that is not universally accepted.
A substantial percentage of business finance specialists agree that having a proper business plan is not enough. Even outstanding company ideas can be rendered ineffective if you cannot develop, execute, and implement a strategic strategy to make your business concept a reality.
A robust business plan is beneficial if you are attempting to acquire capital from institutional investors and lenders. Strive for a well-documented plan that can stand on its own.
Business Plan Rules
Depending on your objectives and the business of your future firm, a sound plan will help you secure funding, bring in partners, and outline the strategy you’ve devised. The purpose here is to exhibit the unique thoughts you jotted hastily on your notepad in a professional way.
Keep your focus on the benefits of your products or services – not the features.
You’ve spent a lot of time discussing your company and target market, but don’t forget to provide information on your product or service. What exactly are you trying to sell? Demonstrate how you are offering a solution in addition to the evident tangible goods.
After you’ve detailed the features, this explanation should concentrate on the advantages.
Make it Clear
Few things cause busy people more annoyance than having to read through poorly written information. If you are not a good writer, employ a professional business writer to help you get your idea down on paper and make it sparkle.
From the cover page to the appendix, your strategy should be clear, simple, and detailed – and no more than 20 pages long. Future investors, partners, or workers who review your strategy will seek particular facts, so make it simple for them to grasp.
Know Your Audience
When drafting your plan, use communications and language that your target audience will comprehend. If your organisation is building a sophisticated technological project and your investors aren’t computer aware, avoid employing jargon or acronyms they won’t understand.
Keep your communications simple and use words everyone can understand to accommodate your investors.
Elements to Include in Your Business Plan
The Executive Summary
This is the first section of your business plan, but it should also be the last. This is the most read piece, and it makes an important first impression on investors. Your target audience may continue reading based on your executive summary.
The Company Description
A business plan should include a thorough company description and explanation of its relevance to the market in which you work. This should immediately follow the executive summary.
The following should be included in this area of the business plan:
- What your company does
- What products or services it provides, which market segments it serves, and who its customers are
- The market setting in which your business works and how it can compete in that climate
The Financial Plan
Without question, your financial strategy is a crucial component of your business plan. Instead of focusing just on the numbers, emphasise the assumptions that support them.
Every good financial plan will include the following components:
- Analysis of breakeven points
- Minimum capital needs
- Forecasts and cash flow statement
- Profit and loss forecasts
Next time we look at how to time your start-up launch.