What’s your business plan? If you don’t know that, then it’s time to get to work: a written business plan is one of the key things investors look for, and it’s also a great way to make sure your business is on track with the goals you set out. If you don’t set out goals, you can’t measure progress – and without that, you can’t report on progress or show an investor where you’re taking the business.
So what should a written business plan contain? It should cover the next few years of the business’ development, and it should give a description of the company and its purpose, explain what you sell or provide and how you go about it, explain your marketing strategy… Forbes have a pretty clear checklist of everything you need to include here.
It’s one thing to know what to include, but a checklist doesn’t always help you get your thoughts in order. Here are nine tips which might help in writing the perfect business plan!
1. Remember to be flexible.
There are certain things which are absolutely essential, of course. You need to state the purpose and direction of the company, and relate it to your competitors. But sometimes you’ll want to add or remove common elements like requests for funding – if you’re not seeking funding, there’s no point in adding a section about it!
2. Know your product and your business.
The business plan should demonstrate that you know your business inside and out, so it’s no time to be sloppy. You need to research anything you don’t know, and be able to answer questions about every aspect of the plan you write. Anyone else with key roles in your business should be familiar with all of this as well. You’re the only person who can be an expert on your business, so make sure you are that expert.
3. Document everything about your business.
This is particularly important if you’re looking for funding, but it’s important to know where you stand at any time. If you are looking to form a relationship with investors, they need to have accurate information in order to make their decisions. If your results aren’t good enough, or if you fail to showcase the success of your business, you won’t get anywhere fast.
4. Have a purpose in mind.
Though it’s important to have a business plan, it’s not enough to just sit down and write one because you think you need one. You need to know why you’re doing it, because that will dictate what you need to include and how you phrase things. If it’s just for internal direction, you may not have to go into as much detail because everyone reading it will know the business. If you’re trying to attract an investor, you need to make sure they get all the information they need.
5. Have a marketing plan.
You can have the best product in the world and it won’t matter if you can’t sell it. Make sure you know who you’re targeting, how you’re going to reach out to them, and what you’ve already done to find them. If previous marketing efforts haven’t been successful, this is an ideal time to re-evaluate and figure out exactly what will speak to the customers you want to attract. If you’re looking for investors, too, they’ll want to know that you know what you’re doing.
6. Know your competition.
Business isn’t exactly war, but Sun Tzu’s words from The Art of War are key anyway: “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” We’ve already covered the fact that you need to know your business inside and out, but you also need to know and understand your competition. How are they marketing their products or services? What are they doing right or wrong? What edge do you have over them? Your business plan is an ideal place to take stock and figure out how you’re going to relate to other businesses in the market – and such information can help investors make decisions as well.
7. Understand your audience.
Sometimes, the business plan is just for internal consumption. Sometimes you’re trying to impress an investor. Make sure your tone is appropriate for whichever audience, and don’t be afraid to have different versions of the business plan which highlight the important things for different audiences.
8. Show that you care.
The business plan is also a place where your passion for what you do should come through. Why do you do it? What do you want to achieve? This can be helpful whether the business plan is internal – where it can be an inspiration – or for investors or potential talent, so it can persuade people to join you.
9. Be honest.
It might seem silly to include a bad financial result in a business plan that investors will see, or to showcase a strategy that failed, but it’s all about how you present it. Showing how you’re going to turn around a bad result will increase confidence in you and avoid a potential investor feeling that you’ve been misleading them. Everyone has setbacks. It’s how you cope with them that matters, and investors don’t necessarily need to see success across the board. It can be just as helpful to see what happens when you fall short.
So, are you ready to write or revise your business plan now? Don’t forget, a business plan isn’t a fossil – it’s going to change over the long term, so it isn’t something you can just write and then file away. Be ready to tweak it, to keep thinking about it, to use it to guide your next steps. If you're still not sure how to start, why not try these business plan writing apps?
Any other tips to share with people writing their first business plan? Share in the comments!
