You should take running a business like taking up a journey. You have a great vision for where you want to take your organization (your destination). To reach there, you have to find the way through a field of land mines.
Here’s a thing, hundreds and thousands of people have navigated through this field of land mines before. Some reached their destinations, while others failed. The great news is that many have shared their experience of the journey, which helps tremendously to find the right way. Your business plan allows you to chalk out where the huge land mines are that claim most lives and helps you navigate your way around them. The simple act of putting down your idea on paper and detailing how the business will operate can be very helpful to ensure that you communicate your vision and that everyone is on the same page. A business plan is also crucial to get support for your vision because it conveys that you have thought through an idea clearly and you aren’t just casual about it.
Here are some tips to keep in mind while building your business plan:
Know your audience
The starting point for any business plan should be the outlook of the audience. You should be clear about the purpose of making this plan? Is it to get funding or is it to communicate the future plans for the company? The writer should customize the plan for different audiences, as each of them has very specific requirements. For example, a potential investor will seek clear explanations detailing the ROI and time frames for getting their money back.
Know your competition
It is ok to name your competition in your plan. Be focussed to bring out what makes you different from (and better than) each of them. However do not ever criticize/condemn your competition.
Get rid of the flowery decks
You should always try and be as much to the point as possible and remove any flowery filler language. Even if it sounds nice, it gets you nowhere and wastes space and time. No investors want to read a 20 page business plan. Get to the point quickly.
Support Your Business Plan with Industry Stats
When a new or young company presents financial projections, Investors will want to look at data which supports the financial assumptions. If the company is using industry benchmarks, it will gain more reliability in the eyes of investors than just saying that the company made reasonable estimates.
List your assumptions
You will always have a lot of assumptions in your plan (e.g. marketing mediums, how many visitors will convert to customers, how quickly you will be able to hire, etc). You will be very sure about them and if possible gather as much data as available to back these assumptions.
Make smart projections
Try and not make top-down projections i.e. there are x number of customers in the world, if we get 1% of them, we will make so much money. Instead, you should find out how many potential customers there are that are relevant to you. Put some figures as to how comparable businesses to yours are doing and then incorporate build-up into your plan (i.e. add customers in a step process vs. getting them all at once)
Well by now, you would have started thinking that making a business plan is a hundred day affair already. Trust Us, it is a very simple process and the basic components of the same are very simple. And finally about time – Please be rest assured, the time spent on making a business plan is time well spent and an early investment in the same would save you enough effort and money at a later stage in your business.
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