Businesses don’t exist in a bubble. Many of them need start-up capital in order to get going. Or a few customers that are willing to buy what you’re trying to sell. From investors to potential suppliers and partners, a business plan is often called for if you want to show you are really serious about starting your business.
But how do you go about drawing one up? What should you focus on? It can feel like an overwhelming task but if you break it down into segments, it’s a lot more manageable, we promise. Here are some things to consider when writing a business plan:
Who is going to read your business plan? As with any form of communication, you need to consider who is going to be reading it. If it is a potential investor you might concentrate on drawing up a business plan that is sleek and super presentable, using clever persuasive wording written in your new brand voice. If it is for a supplier or partner, then perhaps it goes into more of the logistics and nitty gritty of the business, focusing on the small details that are necessary for the successful running of your potential business.
The elevator pitch or executive summary
Firstly, think how you would describe your business to a stranger if you only had 30 seconds. This is the essence of your offering summarised into three or four sentences and it needs to be powerful. Most business plans would open with this executive summary, so you immediately grab the reader’s attention.
The market analysis
Here you need to consider what is happening already out in the market. Who would your competitors be, and how will you do things differently? Or, are you creating something brand new that consumers will need to be educated about? Include your target market here too – what kinds of people are going to be interested in what you are selling?
The sales and marketing
How do you plan to get your message out there? What kinds of budget are you planning on spending on specific channels? Does your brand have a voice and how will you engage with would-be customers? Most importantly, how are you going to price your products or services?
Sales may be sexy but operations are what keep the wheels turning. So many businesses fail because while they may have a great product, appealing marketing and a willing customer base, they cannot deliver on their promises. As an example, consider an online health foods store: they may receive an impressive first batch of orders when they start out, but if their day-to-day operations are not planned down to the finest detail, they may never get a repeat customer. That is why every detail needs to be considered, from when the orders are placed, to the warehouse receiving the order, to the packing of products, to the shipping to the customer and then following up on their experience.
The financial analysis
It is all very well having a dream but most businesses exist to turn a profit. Have you crunched the numbers? What is your estimated revenue for the first month and the first year? And what expenses will you have? There may be start-up costs of machinery, stock, rental of property or salaries –and if you’re hoping to get this cash from an investor you need to be very specific about these expenses and show you have done your research. Finally, you also need to estimate your profit, after all of the above has been taken into account.
Starting a business is one of the most exciting career moves and, if successful, it can be life changing. Having a solid business plan in place will not only win over investors or partners, it will also exist as a road map to refer back to on your entrepreneurship journey.