Business Planning may seem to be onerous, but cavorting this step can leave you uninformed about your firm’s place in the market. The type of knowledge gathered during the planning process can help you anticipate potential risks and develop strategies for dealing with them before they occur. A lot of entrepreneurs return to their business plan even after their firm is up and running to help them refocus and chart a path for the future.
In addition, a business plan is a tool of communication. Banks and investors will be authorizing to invest in the company only after they visualize growth after seeing the business plan. The various stake holders and employees will look at it as a blueprint for the future, bringing together diverse elements such as marketing, sales and operations into one authorized document. A list of useful pointers to make a viable business plan is as follows:
- 10. Write from the audience’s perspective
- 9. Research the market thoroughly
- 8. Understand the competition
- 7. Detailed Attention
- 6. Understand the importance of the Opportunity
- 5. Ensure all key areas are covered in the plan
- 4. Beware of the Numbers
- 3. An Executive Synopsis
- 2. The Intelligent Eye
- 1. Implement the plan proactively
10. Write from the audience’s perspective
The starting point for any business plan should be the viewpoint of the audience. What is the purpose of the plan? Is it to secure funding? Is it to put together a cashflow projection for at least your first year in business? Is it to communicate the future plans for the company? Is it to identify the value of the business and personal assets you can provide as security to lenders, particularly banks? The writer should tailor the plan for different audiences, as they will each have very specific requirements. For example, a potential investor will seek clear explanations detailing the proposed return on their outlay and time frames for getting their money back.
9. Research the market thoroughly
The entrepreneur should undertake market research and ensure that the plan includes reference to the market size, its predicted growth path and how they will gain access to the market. Internet helps in gleaning a huge amount of valuable information from your desktop in the comfort of your own home. It’s the best place to start. Simple online searches can reveal a lot about potential customers and suppliers, as well as your competitors. The Business & IP Centre at the British Library is a phenomenal source of information. You can also see what you can glean from company records held at Companies House. However, the ultimate task is to get out there and talking to prospective customers. And it’s not just asking them whether they like your idea for a business, it’s whether they will buy from you and pay your prices – that determines the viability of your business in the highly competitive market.
8. Understand the competition
One of the most integral aspects to understanding any business environment is recognizing the competition, both its nature and the bases for competition within the industry. Is it a particularly competitive environment, or one that lacks too much competition? How are the incumbents competing—is there a price leader evident? Finally, including a thorough understanding of the bases on which you intend to compete is vital. A note of exhortation: if you identify a segment that isn’t being served by competitors, do find it necessarily why others might have found it impossible to run a viable business in that niche. There might not be enough prospect in it and the investor may defer from putting his money there. Alternatively, you might be onto a winner, having spotted a lucrative gap in the market.
7. Detailed Attention
The business plan should be succinct enough but include enough detail to ensure the reader has sufficient information to make necessary decisions. The plan’s writer usually has a significant role to play in the execution of the venture, the plan should reflect a sense of professionalism, with no spelling mistakes, realistic assumptions, trustworthy projections and accurate content. The writer should also consider the format of the plan, e.g., if a B-plan presentation is required, a back-up PowerPoint presentation should be created.
6. Understand the importance of the Opportunity
The bottom line of business is to make bucks at the end of the day. If you are seeking investment in your venture, it is important to clearly describe the investment opportunity to the potential investors or the venture capitalist firms. Highlight the crux points in your business so that the investors are tempted to invest in your business than keeping the money in a bank or investing in another firm. Estimate the Unique Selling Proposition (USP) for the business. Business plans are designed to help express this purpose in financial and analytic ways and to show prospective business partners and investors how their money will be spent and when to expect a handsome return on their investment. Never do skimp on this essential content.
5. Ensure all key areas are covered in the plan
Conduct proper research on what an ideal business plan should contain; There are many vital points which should be considered in a Business Plan. Include sections on the Company, Product/Service, Market, Competition, Management Team, Marketing, Operations and Financials. The plan should highlight some useful researched data to highlight the propositions in the plan. While many plans are predominantly textual, the plan should include some simple colour charts and spreadsheets.
4. Beware of the Numbers
The number game will be evaluated with accurate perusal. Expenditure costs should be documented with exact accuracy and sales predictions should be both conservative and realistic. While costs are anyways predictable, a crucial factor in the success or failure of the business will be the level of sales. If you are not particularly comfortable with Accounts, have someone assist you in preparing a simple cash flow and break-even chart. This will help the reader understand how many sales you must make to cover your costs, and also how much financing you must raise to start up successfully. Keep in mind that at the beginning there are a lot of start-up expenses in a period of uncertain sales volumes. If sales are on credit it may take up to four weeks for you to receive the cash.
3. An Executive Synopsis
The most important aspect of the business plan is the Executive Synopsis. This is a summary of the entire plan and is usually contained at the start of the plan. It should highlight the cardinal points related to the business and the various prospective avenues for the business. This should be the most attractive section which tempts the investor to read it further. In tandem with this, the writer should also prepare an “elevator pitch” five-minute overview of the key benefits of the new product/service.
2. The Intelligent Eye
Once you have completed your plan set up an independent panel of experts to review the business plan and provide some constructive criticism on all the important aspects. A local Business Link or Enterprise Agency should be able to assist with this. This review should prompt further intricate questions which should be addressed in a proper revised draft. This is very important as it will project the report as a lucrative one to the investor.
1. Implement the plan proactively
A plan should always be viewed as a respiring document and contain specifics regarding dates, deadlines and specific responsibilities. It should be constantly reviewed and updated, as well as being used in regular “plan versus actual” discussions. Businesses rely heavily on people taking positive actions and being accountable for them. A winning business plan will help to ensure that the business is fully focused on what is required to achieve the company’s goals.