A Few Do's and Don'ts of Business Plans
Every year investors receive thousands of business plans from entrepreneurs all over the nation for their financial support. Despite the relatively hard economic times we live in the number of plans proposed by people looking to start their own businesses only continue to increase, while the number of business plans accepted decrease. If you like so many are looking to get your business backed by the financial support of investors there are several things you need to know about the nature of business plans.
First, the sheer volume of entrepreneurs makes in simply impossible for investors to meet with and evaluate each one. This is where your business plan comes in. It is your first, and if lacking in fundamental areas, your last interview with investors and you may not even be present for it. Now the investors are finding that it is easier to say no then it is to say yes. There are certain things every business plan should include, things that are considered fundamental, and if one of these things are missing your plan, no matter how well thought out it is will likely end up in a trash bin. Here are a few things your plan should have and a few things your plan should avoid:
- Make it clear that there is a need for your business. If you don't make sure the investors understand your idea is needed, they aren't very likely to give you the support you need.
- Be sure the view of your business plans are clear to the reader, and make aware the potential changes that could occur as the market changes. You must be able to adapt to survive.
- For early stage businesses keep your market focus relatively narrow. Be optimistic, but not over confident.
- Your business will most likely not gain instantaneous success. Marketing is a large part of any plan. You must declare your target, why they are interested in your product, and how they will learn about your product.
- Set a detailed financial plan that is realistic. Make sure you underscore the difference between your profit, revenue and cash flow. This needs to be done because the investors are looking to see if you truly understand the workings of a business.
- Don't fail to recognize that you have competitors. Every business has a competitor.Distinguish and ask your self what makes your business better than your challengers
- Detail how your company will be organized.Decide what your chain of command will be.
- When it comes to writing a business plan it is good to keep in mind that most investors are busy entrepreneurs. Short is good. Try and keep your full business plan between 20 and 30 pages. The beginning summery of your plan should be no more that five. It is commonly agreed upon that most of the reviewers enjoy business plans and summaries that are on the lower end of the spectrum.
Organization and presentation are just as important as is a full marketing plan. You need to explain your business from the ground up. As the business plan progresses, so must their interest in the company. You can do that through both organization and presentation. Add professional quality pictures and sketches to further impact their imagination. Your dream needs to become their dream.
A business plan is something that takes time. Patience is necessary for a high quality paper. However you need to realize that in the end, your business plan serves only two purposes: first, to set your business aside from all the others and second, to obtain a personal interview. From that point it is all on you.