When you’re considering to put up a business, everything begins with a plan. If you think that winging it is okay, then you are putting yourself in an incredibly risky situation. Any business needs a lot of careful planning to succeed, and you have to consider all the aspects that can affect its success. Therefore, writing a business plan is a crucial first step when you want to start a business.
The goal of every business plan is for you, the owner, to know what to expect from your company. With the plan, you get to understand everything that you have to prepare for, the teams that you must create and manage, your marketing strategies, sales projections, foreseen challenges, and ultimately, your Return of Investment (ROI) projection. Although no one can correctly predict what happens to a business, you get a general overview of what you must do, where, when, and how to do it. A plan gives you some cushion on the challenges that lie ahead, so you get to be prepared with roadblocks that you might encounter.
If you are applying for a bank loan, a business plan is the first thing that creditors will ask you. They want to get an idea of the product or service that you want to sell, and your credibility as a business owner. If the bank thinks your plan is not feasible, or you don’t get them to trust you for your leadership, then there’s a big possibility that your business loan will be denied.
So, what are the things you must remember when writing a business plan? How do you know that you are headed towards the right direction?
Here are some winning tips to help you write your business plan:
1. Know your short-term and long-term goals: it is crucial for people to know your goals so they can align their expectations, too.
2. Thoroughly research your potential market: it is important for you to know your potential audience because an excellent product or service is nothing if you don’t have a market to sell it to. Explore your potential market and spend time with doing this research. If you are not adept at doing market research, consider hiring a professional or team to do a feasibility study for you. You can even avail of the services of tempCFO to manage the financial aspects and iron out unforeseen discrepancies.
3. Know what sets you apart from the competition: a great pitch to creditors and investors is knowing what sets you apart from your competitors. Every business owner would want to outshine his/her competition, so if you can back up with data as to why you can set yourself apart, then it is a big plus to people who would consider investing in you.
4. Know your budget potential: you may have a grand plan, but if you are not realistic, then you are setting yourself up for failure. Be honest with your financials: present what you have and what you need. And be honest, too, with your credit score. There is no point in lying here because it is easy for bankers to check on your score.
5. Write an excellent executive summary: Highlight your business goals, capacity to lead and operate, growth potential, and possible pitfalls and how you can get through them. Many creditors and investors do not have the time to read your 20-page business plan. And so, many time-strapped executives only get to read your summary. Make your summary count and don’t waste the opportunity to draw in your potential investors. It is the part of the business plan that you have to edit and rewrite constantly. Let other people read your summary so they can give their comments.
It can be nerve-wracking to write your business plan, especially if you have to present it to a banker or investor. Allow for sufficient time to write your plan, and let others read it so you can refine it until you are satisfied with the plan.