Although the importance of having a business plan cannot be understated, it can be difficult to know what constitutes good business planning, especially when a plan may need to be presented to more than one individual. Thankfully, there are a few lessons that, when adhered to, can improve any business plan by leaps and bounds.
Reasonable Revenue Estimates
Revenue shows the person reading your business plan the value and size of your business. Optimism is a wonderful thing, but here, realism is most important. When crafting this part of your business plan, it’s important to remember that any stated numbers will need to be justified by research and number crunching.
Doing your homework will also provide you with an understanding of what will drive revenue growth in your business. It will also afford you the gift of confidence when the time comes to answer questions about your company’s inner workings. Instead of quoting revenue projections for your industry, focus on how many customers you plan to have and try and get a handle on how much money they will make for your business. This will make investors sit up and take notice.
A Great Product and a Strategy to Deliver
In addition to ensuring your business plan clearly describes what you’re selling, you also need to ensure that you’ve illustrated how you plan to exploit this opportunity for the purposes of profit. This will include demonstrating how your company will go about achieving this objective. This section of your plan needs to be in as plain a language as possible, free of any jargon that could confuse the reader.
Simplicity is the key when crafting this portion of your plan. State the problem, propose your product or service as the solution, and list the benefits – not the features – of what you are selling. After this, you will need to illustrate why your customers will find your product or service’s benefits intriguing enough to return. As well, you will need to communicate who will gain the most benefit from the advantages your product or service provides.
Keep Projections Credible
The numbers will be a key focus of anyone who will be reading your business plan. And rightfully so; they will communicate much about the stability of your business. And even though your financial projections are just that, the fact remains that they need to be credible, consistent, and able to be defended should you need to do so.
But trying to project your business’s financials can seem impossible. After all, how can you possibly know what your business’s numbers will look like in the next few years? The good news is that you can still ensure that all figures you include are credible; all that you need to do is check that the numbers are consistent with the story the other parts of your plan are telling the reader.
Profitable Market Access
Sometimes, there can be so much focus on the business idea that other elements like a clear route to market can get overlooked. But you can ensure it doesn’t by providing a plan for accessing your target market. This can include a plan for creating awareness online about your business, as well as how you plan to market to your customers. With more opportunities than ever to ensure a clear market route, this section will need to be as comprehensive and credible as possible.
There are several other lessons to ensure that you understand before crafting your business plan. These include consistency, a clear objective, and acknowledgement of your competition, to name but a few. Part two of this series will cover all of these and more, so stay tuned.