A business plan defines your goals and how you intend to achieve them and it helps to attract lenders, investors and partners while acting as a roadmap to track the progress of your business.
To help you come up with a strong business plan here are seven important tips you should consider.
1. Know your audience
The structure and content of your business plan will be determined by the audience you are trying to appeal to. You will have to come up with different versions for the different categories of investors including one for yourself to give a clear guideline on the implementation of the idea and also to help you track your progress as the startup grows.
2. Be concise
If you want your target audience to read your business plan, keep it brief, simple and go straight to the important points such as your target market, strategies and how and when the investors will get returns on their investment. However do not make your audience look for more information by being too brief and overlooking important facts.
3. Be conservative in your financial projections
If you are writing the plan for investors, it is understandable that you want to look good so as to win them over but you have to resist optimism. It is better to have low estimates and perform better when you hit the market than to overestimate your potential. Avoid guess work by hiring an accountant to do the financials for you and organize them in a professional format.
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4. Back up all claims with proof
Most startups have to use projections and assumptions in their business plans since they do not have the required figures. It is important to support your projections with industry statistics to give them more credibility. You have to show how you arrived at the budget, sales projection, pricing and contingency among others.
5. Have realistic time frames
Conduct extensive research on how long similar ventures in your industry took to hit certain milestones. Your company will most likely take the same amount of time. When making estimates add more time to your projections to factor in unforeseen delays.
6. Be creative
Keep in mind that investors get very many proposals for startup funding. Increase your chances of getting noticed from the pile by including something creative in your executive summary.
Do not just replicate a prototype; personalize your business plan by telling a captivating story on how the idea came about. In addition, use visuals such as charts, graphs, and tables to break the monotony of the text and to add more life to your idea.
7. Have your plan reviewed
Give your final copy to several experienced and impartial people who can provide constructive criticism on the content and presentation of your idea and update the draft accordingly.
Working on a business plan can be a daunting task and after going through it countless times, you can become numb and easily overlook some errors. Small mistakes such as spelling gaffes or using the wrong font can be a turnoff to your targeted audience.