Millions of new businesses are established every year but is disheartening to note that only a handful of them get to celebrate their third anniversary. The rest fail not because the management team does not have an idea or the skills to achieve the objectives, but because they do not have an action plan.
Whenever you are planning to venture into a particular business or industry, it is important to take the time to write business plan to help you make the right decisions every step of the way.
Here are six fool proof tips that you can use to write business plan that wins the hearts of investors, business partners, and the customers that you are eyeing.
Get to Know the Industry Well
Just because you have a colleague or a family member who has been actively involved in a particular business for many years does not mean that you will succeed. Even though you may have direct access to their advice, it is imperative to carry out an intensive background research to get a good understanding of the industry.
With this information at hand, you will be able to come up with a business plan that is cohesive and accurate. Note that investors will know if you are conversant with the industry by the manner in which you write the business plan as well as how you respond to their questions. Unlike in the past, you can now do the research online using your smartphone or laptop from the comfort of your home or office. Be sure to jot down all the relevant facts to be included in the script.
Understand Local Audience
As a small business, the chances are that you are targeting to offer a particular product or service to the local consumers. Therefore, it is important to do another study to understand their unique needs and preferences. The most successful businesses in the world succeeded not only because they knew how to write business plan during their initial stages but also because they have a clear picture of the needs of their consumers. They work hard to come up with products that are inclined towards their customer base requirements.
The market insights that you will get when doing this study will greatly help you to start the business successful and scale it up quickly.
Getting Investors on Board
One of the hurdles that most small companies face is having enough capital to support their daily activities such as purchasing raw materials and marketing. Luckily, financial institutions and investors are focused on helping entrepreneurs materialize their business ideas by providing financing. As you write business plan, it is important to keep in mind the investors that you are planning to get onboard to get the best results.
For instance, if you are targeting an individual investor who is well known for funding similar businesses, make sure that you include valuable information that paints a positive image to increase the chances of getting funding. Remember that such investors all well versed in the industry and so even the slightest error can reduce your chances of getting funding from them.
Identify the Key Selling Points
You need to be different from the other similar companies in the market to stand out from the crowd and cut a profitable niche for yourself. Otherwise, providing products and services that many other businesses are offering will just hamper your chances of becoming a successful business owner.
Based on these facts, it is recommendable to list down the key selling points or the things that make your business special and unique in the business plan. Investors love doing business with entrepreneurs who are not afraid to go against the grind and take risks, and the only way at this stage to show them that you have what it takes to run the business is by coming up with the unique selling points. Each selling point should be supported by factual information to enhance its credibility.
Create a Financial Model
To get funding from investors and banks, you need to show them how you are going to manage the money. Coming up with a budget is not an easy task especially for the people who are not conversant with financial calculations. If you fall into this category, it is recommended to hire a professional accountant to create a financial model for your business. This plan has to be free from any errors, as it will be deeply evaluated by investors to determine its accuracy and applicability in the real world.
A marketing plan refers to the strategy that you are going to use to market your products and services to the customers. In spite of the fact that there are hundreds if not thousands of marketing platforms that you can use today to achieve that objective, you have to have a marketing plan that is tailor-made for your business. Otherwise, applying the same strategies used by other similar companies or competitors could result in wastage of time and other resources.
Indeed, writing business plan requires planning and a set of skills. Most people ask the amount of time needed to compile a business plan. Well, there is no definite answer to this question, as each business idea requires a different amount of research to come up with the content. The important thing to remember is that the content has to accurate and related to the niche for the business plan to succeed in helping you start and springboard the business to success.