A business plan is all about packaging. You may have a killer idea, but you still have to sell it. Your goal is to get investors to understand your passion and see its potential.
Writing a business plan really comes down to two things: selling your idea and selling yourself. You need to do both effectively if you want get people’s attention. Here are ten tips to get you started writing a killer business plan.
1. Research
Before you even sit down to write your business plan, you have to do a lot of digging for information. You need to know everything there is to know about the industry you intend to enter. Find out about competition, regulations, niche markets, potential areas for entering the market, capital requirements, and so forth.
You may not put everything you learn into your business plan, but the better you understand the industry, the better your plan will be and the better your pitch will be during in-person interviews.
2. Purpose and problem
When you start to write you plan, you need to ask yourself what problem your business is solving and thus what your purpose is in entering the industry. Are you doing things cheaper, faster, more reliably, or completely different from everyone else in the industry?
If you can, try to solve a problem that no one knows they have. The best companies not only solve problems, they define them in the first place.
3. Target customers
Who are you selling your product or service to? Knowing your customers is more than half the battle because it allows you to project things like earnings, cost, advertising requirements, and so forth. If you know your customers well, you will be able to solve their problems, even if they are not aware of them yet.
4. Be detailed
You need to think about every detail related to your business. That means you can’t just give a broad overview of what you intend to do, you have to be specific.
Once you define the problem, figure out exactly how you will address in the most specific terms possible and then figure out what that will cost, what that will require in terms of employees and facilities, and what kind of revenue it will generate.
5. Human touch
Do not forget to include information about the people you will be employing. Managing employees may seem like a long way off, but having a human resources (HR) plan that details management structure, HR strategy, and staffing requirements demonstrates attention to detail and your intention to follow through on your plans.
6. Prognosticate
You need to give your investors an idea of where you see your company in five, ten, fifteen, or even twenty years. Detail your plans for expansion, whether you intend to leave the company and how, what you will do in certain foreseeable scenarios, and so forth. The more you can demonstrate that you are trying to anticipate future events, the more confident investors will be.
7. Marketing plan
You need to explain how you will get word out to your customers. A lot of great ideas fail simply because no one ever hears about them. Figure out how to spread the word about your company and figure out what it will cost. Put it all in your plan so that investors know that you are going to work hard to promote your company.
8. Be concise
Whatever you do, do not ramble and do not beat around the bush. Get straight to your point and then move on. Once you write your plan, rewrite it, and again, rewrite it until you can’t possibly whittle it down any more. Make sure you say the important things upfront so that you capture interest before it starts to wane.
9. Research your investors
Tailor you business plan to the needs of each investor based on what they are most likely to find important. Some investors will emphasize marketing over finance and some will care more about management than they do about future projections. Figure out what is important to each person you pitch your plan to and tailor the plan to meet their expectations.
10. Be honest
Most investors do what they do because they love it and because they are good at it. Do not think that you can pull the wool over a seasoned investor’s eyes by minimizing the risks your business faces. Be upfront about risk and how you intend to mitigate it. Remember, you want the investor to be as confident in you, personally, as he or she is in the business you are promoting.
The bottom line is what all investors are interested in. If you follow the tips above, and keep harping on the basics of what your company is, what it does, and how it will earn money, you will be in a great position to put your best foot forward.
Anytime you are pitching your idea, keep in mind that you want to be concise, compelling, and confident. Do those three things well, and you’ll have people begging you to take their money.