Crafting your business plan is not an easy task because you have to look at various aspects and be sure that each and every aspect is carefully examined. Some entrepreneurs have worked on their business plans but might not be satisfied with the same.
Either way, we have some tips to help you craft a strong business plan.
#1. Know your competition
Make a list of successful as well as unsuccessful companies home you’re competing with. Learn from the success stories of successful companies and mistakes of the unlucky ones.
#2. Know your target audience
Your customers are not the only ones whom you’re targeting. Many people make this mistake, and it is one of the reasons because of which they fail. Your bankers or venture capitalist, individual investors, potential joint venture companies, etc. are even your target audience.
Knowing your target audience will give you an opportunity to create several versions of your business plans and accordingly present it to them.
#3. Be realistic with your plans and ideas
Thinking big is good but mentioning the same in your business plan can have a negative impact on your company. You might believe that you’ll be in a position to perform fast as compared to your competitors but in reality, things might turn out to be slightly difficult for you.
At times, you might not be at fault because if you have been working with a big company in the past and had plans to start your business venture at the moment, you know things used to happen really fast in your previous company and show your plans and ideas might look unrealistic as you start your business venture. In this case, necessary modifications are to be made in your thinking process, and you’ll soon be coming up with realistic plants with respect to time and resources available for you.
#4. Conservative financial estimates and projections are important
Projections can be misleading, and we all know it. So, if you’re noting that you’ll capture a certain percent of the market in the very first year, make sure that you hint at what those numbers will be.
However, ensure that the percent market share and the numbers hinted are conservative. For example, even if you think that you’ll capture 20 percent market share in the first year, noting it as 10 percent can make you your projections more credible.
#5. Consider fixed costs
It is the fixed cost that matters, and if you’re not coming up with realistic numbers, in this case, it will be difficult for others to have faith in your projections.
#6. Logical and effective planning
While communicating with a particular party, think like them. For example, if you’re targeting your banker, think like a Banker and right what would they like to see in the papers.
#7. Create a strong management team
Having a strong management team will boost your credibility, and it will change the game for you. So, make sure that they have good credentials and expertise. They are skills will help your ventures succeed.
If you think that you lack in certain skills, consider adding an advisory board of people specializing in the field and include their resumes on board.
#8. Make sure that you have substantial proofs to back up your claims
If every claim made by you is not backed up with substantial proof, your target audience will not show any interest in your business plan. For example, if you say that in the next five years you’ll be a market leader in your field, you’ll have to mention why you consider it and how you are different from your competitors.
Even if you’re not, in that you have a highly qualified management team; you’ll have to present their resume and demonstrate their experience to make your business success.
#9. Describe your facilities and location
If you’re planning to perform your work at a particular location with specific installations, describe them. If detailed explanation is required, let your target audience know about the three important questions – why, where and when. Detailed explanation is usually not required in most of the cases, but if it is necessary, you’ll have to ensure that your explanation is good enough to keep the target audience satisfied.
Note: Do not choose the property rent for any other place because it can have a considerable impact on your connections and the same will be visible.
#10. Payout options for the investors should be discussed
Every investor has their requirements, and you’ll have to cater to them accordingly. However, as far as money is concerned, everyone wants their money back at a decent rate of return. Most of them want it within five years while some of them will be willing to wait a little longer.
Their Expectations might also be dependent on the brief description of options you present in front of them.
#11. Avoid mentioning any rumors about your competitors
Your target audience is invested in your business plans and not about others. When we talked about rumors, we do not have a backing for your claims, and it can turn out to be terrible for your prospect. So, avoid saying things like your competitor is going out of business and you’ll be in a position to fill the position with your business plans.
#12. Avoid long documents
First of all, they will attend the meeting to listen to you and not to read long documents. So, avoid making the mistake of forcing your target audience to read along documents. At the same time, make sure that your presentation is sweet, simple and short. The money and time are valuable, and if you do not value at, they might not value your business plans.
#13. Presenting amateurish financial projections will backfire
Being professional is important, and you need to understand that the other party is investing a certain amount. This means that you need to maintain your level of professionalism at every level and continue with the same approach till the very end.