When starting your own business, one of the first things that you need to do is create a plan. Your business plan provides you with guidance as you get things started as well as later when you begin to grow. It’s also a vital document if you need to ask a bank or investors for funding. Research has shown that business owners who create a plan are more likely to succeed. Here are five tips for helping you to create your perfect business plan.
Know What Goes into a Business Plan
Before you can write a business plan, it’s important to know what goes into one. Several components need to be addressed:
- An executive summary
- A description of your business
- Your business goals
- The structure of your business and management team
- The products or services you plan to offer
- Your marketing and sales plans
- A financial analysis
- Financial projections
- An appendix including other important information
While not every business might need a highly detailed plan, the more information you include, the more guidance you have. An in-depth business plan can also help you to secure a loan or funding from investors if you need it.
To create an effective business plan, you need to research everything. Know the industry you’re getting into. Learn about recent trends and where the industry is headed. Research your competition and know what other companies are doing. Understand your target market. Get to know your products and services inside and out. The more knowledge you have, the more effective your business plan will be.
For every claim you make in your business plan, you need to back it up with proof. No matter what you say you can achieve, you need to prove it. This is especially important for banks or investors, as anyone providing you with money will need to see that you’re worth the risk. You can use rolling wave planning to show how you determined tasks, resources, and budget allocation. Show the resumes of your management team to demonstrate that they are as good as you say they are.
Be Realistic and Conservative
While there’s nothing wrong with being optimistic about your new business, you need to be realistic and conservative about what you can accomplish. Overestimating is a common mistake made by new business owners, especially if you’ve worked with a big company for a long time. Always err on the side of caution and assume things will take longer than you want to say, even if you’re confident you can get them done sooner. Make conservative financial projections. You don’t want to promise a bank or investor something and then not be able to deliver.
Incorporate Visual Elements
Your business plan is a formal document, but visuals can be a major asset. Having to read through a lot of information can be boring. You might have trouble looking for the information you need or a potential investor might completely miss an important piece of information.
Visuals provide a break from the text. They’re visually appealing and can be incredibly helpful when implemented appropriately. Readers are also more likely to retain information seen in a graphic than information written amidst other text. Presenting important information in a graph can also provide you (and your readers) with a better understanding of where your business is headed rather than trying to imagine it in your head.
There are plenty of eye-catching visuals that you can incorporate into your business plan, such as pictures and graphs. You can also use a template to help you get started, but just be sure to make that template your own.
Writing a business plan can be a daunting task, especially if you’ve never created one before. These tips should help to make the process a bit easier and enable you to create a plan that captures the vision of your new business perfectly.
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