Having a vital business plan is one of the best ways to secure investors on why they should invest in your business. A business plan that’s complete and well-thought is the most valuable tool in convincing them to sit on your side of the table. Aside from giving your business a direction, it also defines your objectives, maps out strategies to achieve your goals, and helps you manage possible bumps along the road.
However, developing a business plan that makes sense for your company can be a significant challenge because it is overwhelming and time-consuming. All the more if you have never been through the process before.
When writing an effective business plan, you need time, hard-work and grit. Although the process seems challenging, just look at the bright side because it can be very rewarding in the long run.
Here are five tips to ace a killer business plan and give you that thumbs up.
Cover the Important Stuff and Get Rid of the Fluff
Keep everything simple and crystal clear. Discuss only important stuff that matters. Stuff that makes money and keeps your business alive. It’s important to understand what to sell, how to produce it, whom you sell it to, and the value. It’s also crucial to outline your process for making it all come together, your expenses, and what the material risks are in starting your venture. Be as concise as possible and get to the point quickly, but make sure you tackle all important matters. Treat a like a skirt; short enough to make it interesting, but long enough to cover the essentials.
It is good to be optimistic because it shows investors that your company is confident about the market opportunity and its ability to execute on that very same opportunity. However, over-optimism leads an impression that you do not fully understand the road ahead. Therefore, your business plan should be realistic – it should portray sobriety and credibility to the investors. Be honest with yourself in your business plan and present a compelling, optimistic picture, but continuously back them up with undisputed facts and educated assumptions to build genuine excitement. It’s far better to underestimate than set expectations that aren’t fulfilled.
In making your business plan, include a creative element so you stand out and grab your audience’s attention. You can use templates, but avoid looking identical to a template. Make something unique to make the plan associated with you.
Show You’re Conservative
Everyone says they are being conservative in their business plans, but they are not. You should be conservative in your approach and projections. If you feel certain that you will capture 50 percent of the market in the first year, you are obliged to say why you think so and what those numbers imply. Instead, make your financial projections more conservative – for example, a 10 percent market share is more credible.
Update Plan as You Go
Things change. Every assumption that you made does not come true every time. You cannot predict everything on day one. Update your business plan every day whenever things change. Some of the products you think you are going to take off may fall flat, or from out of nowhere a new revenue opportunity may present itself. Expenses are often higher than anticipated and your final projections will probably come in lower than anticipated. A business plan is a living document and it evolves with your company and reflects the business you’re running. Make adjustments as needed. Set new goals, new plans. What matters most is that you are moving forward in an organized and timely manner.