A business plan is an invaluable tool for the startup or expansion of any business. Business plans can take many forms from a simple strategy document to a very detailed blueprint for a business. Business plans can also be used for a variety of purposes including seeking financing or attracting investors. No matter what the objective of the plan is, here are 5 ways to effectively craft any business plan:
1. Identify the Purpose for the Business Plan
A business plan should be written with your purpose in mind. Are you writing the business plan to obtain financing? Then demonstrate a solid grasp of the finances. Is it a blueprint for your own internal use? In that case, don’t sugarcoat things: candidly examine potential pitfalls, and how things should operate.
2. Identify the Audience for the Business Plan
There are different audiences who examine business plans who will be attuned to different elements. If you are seeking a loan, a banker will look for security and a solid ability to make the payments. If you are seeking venture capital, an investor is going to look for an impressive return on investment and a clear exit strategy.
3. Define Your Competitive Position
What makes your business unique in the face of competition? Do you offer lower prices? A better product? Better service? Make sure your plan analyzes the competition and showcases your competitive benefit.
4. Clearly Understand Your Market
A business plan must identify who you will sell to in terms of location and whether they are consumers or other businesses. If consumers, you should profile them in terms of demographics and lifestyle. Business clientele should be identified in terms of industry and demographics like company size.
5. Have a Good Grasp on the Financials
Financials provide the reality check for the business. Simple financials would include a startup budget, pricing schedule, and a sales projection. More robust financials would include income statements along with cash flow projections and possibly a balance sheet for the business. It’s important to research the numbers to ensure reasonable accuracy.
Whether starting out or growing your business, a business plan is an important tool, particularly if you need financing. If you need help in preparing a plan for seeking startup capital or expansion financing, contact Business Capital Providers.