Creating a business plan can seem an overwhelming challenge for those trying to set-up their very first start-up – however, a well thought out plan provides far more than a tool with which to secure finances.
Your business plan can help keep your mind focused on the core objectives of the start-up while providing a valuable yardstick against which to measure actual performance.
If you’re writing your first ever business plan, keep the following in mind:
- Create your plan with the target reader in mind. The emphasis of your business plan should appeal to the very people you’re trying to reach out to. For example, if your business plan’s main objective is to secure funding for your small business startup, make sure the key information financiers will want to know about are included and supported with evidence.
- Include an executive summary. The very first segment of any business plan should be an executive summary explaining the business proposal and an overview of what the business aims to achieve. The executive summary is possibly the most crucial aspect of the entire plan, and will ideally include some content that can excite the reader.
- Provide accurate and detailed market research. A balanced business plan shows that the management of the company have conducted thorough research on the niche the startup will operate in. This should include size and location of the target market, industry growth projections and competitor analysis.
- Know your numbers. If your aim is to use the business plan to court financiers, it’s crucial to know the key numbers inside out. Your financial forecasts must be reasonable, accurate and in line with market norms. You’ll need to provide detailed financial forecasts, which will include a cashflow forecast and a likely break-even analysis. Refrain from being wildly optimistic with your financial forecasts – the numbers you present will be scrutinized vividly when presented to a bank or other financier.
- Cover all business bases. Beyond finance, your business plan should also include key information about marketing and operations. How will you bring the product to market? Which online and offline methods will you use? What amount of finance will be used to raise brand awareness?
- USP (Unique Selling Point) is key. Your business plan should reveal how your product or service stands out from the crowd. Why would potential customers choose your product over more established, seasoned brands? Ideally, your USP should be closely linked to solve a key issue/problem that customers have that has been identified by your market research.
- Aim to make the plan visually stimulating. While a large portion of your plan will be text based, including charts and visual aids can help make the plan more interesting for the reader.
- Highlight management skills and experience. A summary of the management and their background.
- Proof read your plan. For many small startups, the plan quite possibly will be written by a one-man-band entrepreneur. Entrepreneurs while often highly talented may not be the best of writers. Proof read the document, checking for spelling errors and fluency. It’s always a good idea to have your business plan reviewed by someone who is capable of providing objective scrutiny – they might be able to spot gaps in your plan that you can rectify.