- The Essential Dos and Don’ts of Writing a Business Plan - May 8, 2019
Successful business plan creation involves a certain set of rules you should follow closely for maximum results. Check out the following dos and don’ts to help you in writing an engaging business plan that increases the chances of your proposal being accepted by interested investors.
Business plan to-dos
- Open up with a clear storyline
First impressions really count. While this may sound like a cliché, it can’t be stressed enough. You will absolutely need to grab your client’s attention and never let it go.
In one sentence, provide a reason why potential clients or investors should take a look at your business plan in the first place. Then, create a clear and concise storyline around that reason and supplement it with important facts and details about your business. It doesn’t have to be too long, or you risk losing interest right from the start. Trim it at least twice so it’s distilled down to the barest elements.
- Understand market demand
More often than not, entrepreneurs develop a business idea because they notice a missing piece of the market.
Therefore, think about what “gap” your product or service can fill and the proposed solution for it. Do your share of work and understand the micro-economic environment so you can create a coherent piece. Impress your clients with your wealth of knowledge, and they’ll think you went the extra mile to partner up with them.
- Be realistic
It’s OK to provide estimates in your plan. There will always be contingencies that can throw off anticipated figures. Provide a financial forecast and gather convincing evidence to back up your numbers, involving advisers, suppliers, equipment, managers, employees and distributors.
Make it presentable without becoming overly complex and bogging down the whole proposal. A few charts, graphs or infographics can lay out the key details.
- Lay out the risks
If there’s one thing entrepreneurs often forget when writing business plans, it’s to address specific concerns investors or clients may have. Therefore, it’s of utmost importance that you list key concerns and address each of them in a compact, yet satisfactory manner.
Risks are always part of entrepreneurship, so why omit them from your proposal? Impress your potential investor or partner by addressing any issues directly and analytically. For example, what are the risks associated with the niche of your business? Or with the industry overall? How about the competition? Or market demand and resource deployment? Then, follow up those questions with your action plan. How will you protect yourself against those risks? How can you mitigate them or even profit from them?
Again, make it simple enough that the answers can be understood in a minute or two. Use graphics or charts for maximum absorption and comprehension.
- Make them see why you’re worth it
You’ve now created a business plan that you’re 100 percent confident in. Have you included a section that speaks about the big picture of your business?
If not, do so by answering the following questions:
- What sets your business plan apart from others?
- How is your proposal competitive and advantageous for the investor?
- How can you generate favorable returns for you and the investor?
Business plan don’ts
- Forgetting your audience
The purpose of writing a business plan is to connect with your investor and make your intentions known. Write for the intended audience with the tone, voice and content that they’ll understand. In other words, know your target audience!
Your business plan’s language should be geared toward the client, whether they are an investor, a potential client or a banker. When necessary, come up with verbiage that’s distilled down to the basics for those with little knowledge or experience of your segment or product. Minimize jargon and industry terms and simplify. The rule of thumb is that the fewer technical terms you can use, the better.
Keep in mind that you’re writing to a person and not a machine, so don’t cram in too much information.
- Being too slow to act
Time is of the essence in the startup world. When a great idea hits, don’t wait. Jot it down on a notepad, a laptop or your phone. Once you’ve come up with the concept, sit down and start working on the business plan.
The longer you wait, the more momentum you lose and with it, your drive and passion deplete. Don’t be too slow to get things rolling and devote your time and energy to getting started on your business plan.
- Ignoring the competition
There will always be competition, but you can use it to your advantage. You can learn from your competitors by observing what they do right and areas in which they could improve. Assume that your business plan is completed and you’re ready to set your plan in motion. How would competitors react to it, and what would your strategy be?
Come up with an additional plan on how you’ll react in turn, and what you can do to offset those things. This will show your potential investors and future clients that you’ve thought about every possible angle and always strategize one step ahead.
Keep the above dos and don’ts in mind when writing up your business plan and you’ll be off to a great start. Remember, if you put the effort and hard work in at the start developing your business plan, you’ll have a track to follow (and update) as you start up your dream business.