It is said that if you fail to plan you plan to fail. This adage clearly accentuates the importance of having a business plan. Knowing the importance alone is not enough – you must know how to write one. Of even greater importance is to know how to write the one that will blow you off your feet.
In this article, we shall be discussing how you can do that. We shall highlight areas and pertinent details you must pay attention to in order to write a great business plan. Studies have shown that entrepreneurs with plans are more poised to succeed than those who do not have one. That is why this article is paramount.
Do It Yourself
There are countless business plans or templates on the internet, visit this website for examples. The natural inclination is to just edit a pre-existing one. Some entrepreneurs even outsource from someone to draft it for them. Much as this works in some cases it is not the best approach. You have an intimate appreciation of the vision you have and want to materialize. Thus you are well-positioned to articulate your plans better than anyone else.
It is understandable that there are portions of the business plan where you might need help but you can create your own draft. Imagine your eyes are open and the person next to you has theirs closed. Then you ask that person to describe what you are seeing; that is how it kind of is like when you ask other people to do the draft for you.
Do Your Research
As an entrepreneur, your area of focus is a field that falls under a particular industry. There are others that have come before you. There is a wellspring of information regarding the dynamics of your field and your industry. Your business also entails products in the form of goods or services. There is again a load of information pertaining to your products. Why are we mentioning all this? It is to drive home the indispensable importance of conducting in-depth research when doing a draft
For instance, SWOT (strengths, weaknesses, opportunities, threats) and PESTEL (political, economic, social, technological, environmental, legal) analyses show that someone has done thorough research. A poorly researched plan is easily noticeable.
Apply The Law Of First Principles
In the simplest of terms, the law of first principles is a thinking process where you break down something into its core ideas or components and then reconstruct them into a whole again. When drafting a plan you must employ this thinking approach. Start with the core ideas or components. As an entrepreneur you have the vision to start a business obviously; start by asking yourself what the core components of a business are.
Core components here can be product, market, financials, marketing strategy, supply chain, and so on. As you reconstruct or build up those core components into a whole your plan comes alive. This helps simplify the process so that you do not feel overwhelmed. In fact, you can apply this thinking process to virtually any endeavour.
Know What Matters In Your Projections
Financial projections are critically important. Prospective partners or financiers closely look at those projections. The unfortunate thing though is that most entrepreneurs have a gross misconception about what matters most. Most of them think that financial projections must show outstanding profits. In focusing more on profits they negate the growth aspect which prospective financiers or partners are more concerned about.
Growth matters more than profit – your plan particularly your financial projections must clearly show that. If you are growth-oriented you will notice that the financial projections you come up with will be reasonable.
Address Your Intended Audience
Business plans are written for different purposes so the intended audience will differ. For instance, you can write the one that is intended for sourcing funding. It is also possible create a draft as simply a personal reference document. Just these 3 scenarios mean you will draft your plan with varying emphases due to the intended audience.
Intended for a prospective financier, your plan will have more emphasis on proof of return on investment (ROI). One for a prospective partner will have more emphasis on their contribution and what it is in for them. A personal reference plan might not be as detailed and comprehensive as the two we have just highlighted.
Verify And Proof-Read
This might sound so obvious but you would be amazed at the many entrepreneurs found wanting here. In drafting your business plan you will most likely include statistics, figures and a wide array of information. This is information you might find in the public domain e.g. the internet. Just because something is online does not necessarily make it valid. It would be embarrassing to lose a funding opportunity simply because you quoted an inaccurate piece of information.
Diligently verify everything; if you are not sure about something it is better to not include it. Do check your grammar, your spellings and all – basically just your English and basic layout of the document. It is can work out to your disadvantage if there are unnecessary mistakes in your business plan.
Be Precise And Concise
This is a key balance that you must strike in your business plan. You do not want it to be too long or too short yet at the same time it must cover all the essential details. Over and above that it must engage whoever reads it; they must be sucked in. Your business plan can be detailed but if it is not precise and concise your efforts might not get due attention.
If you do these 7 things you will definitely come up with a winning business plan. Remember that aspects such as scalability and profitability must be abundantly evident in it.