A great idea lies at the core of every successful business, but turning it from an intangible dream to a concrete way of making a living can be a challenge, especially when it comes to getting investors on board. That’s where a solid business plan comes in. Laying out your expectations and goals in a transparent and achievable way is a crucial step in turning that brilliant idea into a reality, and entrepreneurs who take the time to craft a business plan are 2.5 times more likely to achieve their goal.
If you’ve never created one before, don’t worry, we can guide you through every step of the process. Here are a few hints to get you started.
Don’t skimp on the research
Arguably the most important task after coming up with your idea or product in the first place is gathering the information that will form the foundation of your business plan – and don’t be tempted to miss anything out.
Analyse your strengths, weaknesses, opportunities and threats; know who your customers are and who your competition is; what experience the team around you has; where your business will be in five years’ time, and why your idea/product will be on everyone’s lips in the future.
Know your investor audience
Who are you trying to persuade to back your business? Understanding your investors and what attracts them will be key to ensuring their financial support – think Dragons’ Den but without the TV cameras.
Try to anticipate the sort of questions they may ask and, if you’re pitching your business plan to bankers for example, make sure you include information that is relevant to them.
Be conservative with projections
Every entrepreneur believes 100% that their business will succeed, but offering unachievable targets won’t convince investors to part with their cash.
It’s better to play safe with predicted figures than over-estimate. If you think your firm will have a 20% market share in five years, suggest a 10% share in the business plan. Be sure to offer best and worst-case predictions so investors have the broadest view.
ROI? Don’t be shy!
The biggest reason investors back any form of business is because they think it will make money, so don’t be afraid to include what they can expect to get back in your business plan.
Lay out the payout options clearly and logically, alongside when investors are likely to see them.
Make the executive summary count
The majority of investors will focus on this part of your business plan, so take extra time to make every word of it count – but don’t write War and Peace! The better this section, the more you improve your chances of securing a face-to-face meeting and potentially backing for your business.
A strong executive summary is the best way to grab an investor’s attention, so keep the design clean, the language clear and simple, and stick to provable facts. Make your case for your business so tempting they simply can’t pass it up.
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