A corporation’s business plan, its roadmap, is one of a business’s most important documents.
The plan should be a complete guide that provides solutions to the questions and worries entrepreneurs will face in each stage of its development – laid out in detail. It should specify both a literal and proverbial roadmap to reach the financial goals that the corporation has set out to accomplish.
IDENTIFY YOUR AUDIENCE AND THEIR NEEDS
The main purpose of a business plan has less to do with the actual product or service and more about the process of delivering these products or services to the consumer – an audience one must fully understand. Being able to successfully explain this process through a clear idea will allow the reader to understand the feasibility and viability of a business. A thorough description of how the business will bring its product/service to market is much more valuable in the analysis of a business than merely describing it.
SHOW YOUR TEAM’S STRENGTHS
It is very uncommon that a business will be headed to success by an inexperienced manager, and investors know that. It is extremely significant for a small business owner (SBO) to highlight any relevant knowledge. Savvy investors recognize that without the right people at the helm, nothing else really matters. SBOs also shouldn’t forget about their team members. Personnel remained hired for a reason, so they likely have a relevant experience they bring to a business’s contributions. It’s important to include a “Personnel” or “Management” section highlighting a team’s industry experience and insight.
ANSWER DIFFICULT QUESTIONS
Businesspersons must ask tough questions and, more importantly, find solutions to them. Investors will be looking for holes in a business plan. SBOs must be able to self-scrutinize, look for irregularities and even scrap their own work if need be, because readers will most definitely be critical and even defensive as they read. By doing so, SBOs can reassure investors they have thought of every possible flaw and have provided answers. It is good practice to have a tutor or trusted friend review the document and play devil’s advocate as well.
INCORPORATE STATISTICS WITH CAUTION
Stop for a moment and think: What good is it to provide a business plan that projects revenue and profit, more than three years into the future? As a new business, it is almost impossible to accurately forecast revenue and profit. The fact is seasoned investors know this. By becoming overly technical in their approach with numbers, startups may in fact come across as naive. It is far more important to show that an owner has considered financial drivers that will ultimately determine the success – or potential failure – of the business. Additionally, numbers need context. When introducing figures, startups will want to make sure to explain why they have included them, and their relevance to the success or failure of the business.
REMEMBER, IT’S JUST A PLAN – WHAT MATTERS IS FVA!
While a business plan is an essential introduction to a venture, it is by no means set in stone. With this in mind, no matter what the contents of the business plan are, businesspersons should stick to what matters: feasibility, viability, and attractiveness.
• Feasibility in that you can successfully bring the product or service to market.
• Viability in that your business is sustainable.
• Attractiveness in that your product or service fulfills a meaningful consumer need.
Make sure to take the time to do the job appropriately. Be sure to keep detailed notes about your sources of information and on the assumptions underlying your financial statistics. With all of this in mind, the problem shouldn’t be if you should write a business plan, but how will you draft an effective business plan that will take your business where you want it to go.