Business plans have been an important document for new businesses. Are they still important? If yes, what data and best practices can help you to create a winning document that will help your business get the money you require and ensure your venture lasts for a long time? Before digging into how to create a business plan, you must first decide whether you even need one or not?
There was a time when approaching something with a business idea without a business plan was like a joke. Now, things have changed.
Why do we need a Business Plan?
Only because it is the reputation quo should never be a line in the vocabulary of a startup founder these days. Traditional business projects can be huge beasts of a project that suck money, time, and mojo at a significant moment. Do not do it unless you know the reason behind it and what you are going to achieve with it.
Business projects are a necessary instrument for raising capital from potential investors, lenders, and bankers. It is an important document while taking your business public or selling the entire or some parts of the company. In fact, without one, soliciting a bank for money is pointless. To potential investors or lenders, it not just offers information and reveals an assessment of your company’s feasibility, but also reflects your management capabilities.
An objective, analytical business plan convinces you that you are organized, capable, and fully prepared. One that is badly researched, or makes unsubstantiated assumptions shows that you are not experienced and reckless. Lenders get a huge number of proposals and generally do not spend much time with those. This means that your business idea has just a few minutes to create a good impression and must serve as a sale tool. Do your best and let it favorably represent you as the competent and capable business owner that you are.
Preparing a business project will take some time, but it is worth your investment in the future. Not only a business plan will offer important information to outside lenders and investors, but it will lay out the game plan from which to operate your company. This is, by far, the most significant use for your plan. It will serve as a blueprint and direct you towards achieving your business objectives.
A usual entrepreneur has a good business idea but is hardly qualified in all areas of running a business. A good business plan is a comprehensive, well-thought-out document that offers the basis for entrepreneurs to make good business decisions. Whatever is the motto behind your business plan, ensure it is accurate, thorough, and supports all your claims with important facts.
How to Create a Business Plan
There are a few things to keep in mind while writing an effective business plan.
Understand your audience- When you know who will read your plan- even if you are simply writing it for yourself, to explain your ideas- you can modify the language and level of detail. This can also ensure that you are including the most important information and find out when to omit sections that are not as effective.
Have a clear objective- You must put in more work and deliver a thorough plan if your objective is to secure money for your business versus working through a business plan for yourself or even your team.
Invest your time in research- Segments of your business plan will mainly be informed by your vision and ideas, but some of the most important information which you need to include depends on research from various independent sources. This is where you can invest time in understanding to whom you are selling to, whether there is a demand for your products, and who else is selling the same products and services.
Keep it short and always to the point- No matter for whom you are writing a business plan, your business plan should be readable and always short- preferably, not longer than 15 to 20 pages. If you do have extra documents that you think are important for your audience and your objectives, consider adding them as supplements. Keep the style, tone, and voice consistent. This is better managed by having a single person create the plan and letting him/her edit it correctly before distributing it.
Things to Include in a Business Plan
Now that you got an idea of how to create a business plan, it is now time to fill it. We have divided it by section to help you create your plan step-by-step.
Executive summary- A good executive summary is one of the most important sections of your business plan- it is the last section which you should write. The main purpose of an executive summary is to distill everything that follows and provide time-crunched reviewers an overview of your business that convinces them to move further. Again, it is a summary, so highlight the important points you have uncovered while writing your business plan. If you are writing for your planning purpose, you can easily skip the summary.
Make sure your summary is not longer than one page. Indeed, that space constraint can make squeezing in all the salient info a bit stressful- but it is not impossible. Here are a few things that the summary of your business plan must include:
- Business concept. What does your business do?
- Goal and vision. What does your company want to do?
- Product description. What are your products and how are they different?
- Target audience. To whom are you selling your products and services?
- Marketing plan. How are you planning to reach your customers?
- Current financial condition. What do you earn at present?
- The team. Who is involved in the business?
Benefits of building an Online Business Plan
First and most important, you want to spend your time building your business, not creating documents. Creating your business plan lets you be more productive, moving aside unnecessary difficulties like formatting and layout to stay focused on the vision and message of your business.
Bring investors or stakeholders closer.
By inviting the investors into your environment to check your business plan, you are bringing them closer to your organization, staying engaged throughout the process, and putting forth a better brand image in the procedure.
Give a good presentation. Having an online business plan also lets you offer a dynamic presentation to investors. All of us know PowerPoint is outdated, so why not take them on a journey inside your interactive online presentation?
Keep up with the current technology. If your sector or business involves any kind of technology, an old business plan will make you look outdated and old-fashioned. However, if those adjectives define your investors, you still have the option of turning your online business plan into a simple PDF to print out for them.
Also, multimedia assets let you include video testimonials, a portfolio, an introduction to your staff, and more about your activities.
Collaborate- Making an online business plan is made simpler because it is more collaborative. You and your teammates and your advisors can work together within the cloud-based business plan at the same time. This is important as your technical experts know what they are discussing about, but then your sales guy can help them bluff, rephrasing and make it more interesting.
These are some of the major benefits of creating a business plan. Have you created a business plan for your business? No? Try making one by using these tips and let us know how it worked for you.