Do you have a business plan? It is true that the experience of running a business can be different from one founder to another. However, there are certain peculiarities and elements that every business must account for; this is why we have business plans.
A business plan is a written document that fully describes a business’s objective, carefully outlining and specifying how the business will go about achieving its goals. It details the nature of a business in its environments and is indeed a tool that any successful business should have in place.
You can think of it as synonymous with written roadmaps, which offer direction for the company and show how it is to go about its objectives in a diverse range of business activities.
Why Do You Need a Business Plan?
You need a business plan so you can understand the nature of your business better. It shows you what you need to work on while also proving that you’re truly serious about your business. It is also a tool to pitch your idea and projections of the business to investors to show them why it is worth their while.
A business plan also helps you establish business milestones for you to cross as you go and helps you understand your competition better. Finally, a business plan enables you to understand your customers and their needs while also giving you sufficient information about the market you’re going into.
Tips for Creating a Successful Business Plan
Get to Know Your Business
Attempting to create a business plan without getting to know your business is futile; you will not have enough information to guide you. Get to know your business. What are your goals and objectives? What do you hope to achieve, and what problem does your business seek to solve? What are your mission and vision statements? By understanding these, you get clarity about your business and gain clarity on your value proposition.
Study Your Competition
Irrespective of what field you’re going into or what products or services you’ll be offering, you can be assured that you’ll have competitors. Whichever way it happens, you must study your competitors, especially when they have been in the field before you.
Understand what pulls in their customers and study their business strategies. You don’t necessarily have to imitate them. Still, by merely recognising them and studying what they do differently, you automatically have an edge, and you’re able to add the information you’ve gleaned from studying them to your already existing strategy.
Who Are Your Target Audience?
Before drafting a business plan, you need to know who your business is targeting. This will determine what strategies to put in place. For example, if your business is targeted at meeting children’s needs in primary schools, you’ll employ a very different approach from someone who’s targeting an older market. Knowing your target audience is a pivotal part of creating a successful business plan.
Be Conservative in Your Financial Estimates and Projections
The last thing you want to do is set your financial estimates too high. Not only will it place avoidable pressure on you, but it will also make you lose sight of what’s really important. Be as conservative as possible while drafting your business projections.
Be Time-Conscious and Realistic
While you’re working on your business plan, it is important to be realistic with your time and your projections. Your time and resources cannot be overestimated so you must take into account the exact amount of time or resources that you have and try not to be overly optimistic.
Build a Strong Team
Having great people putting in their bits to grow a company cannot be overestimated. Know the people you might need to work with to build your business up. They don’t necessarily need to have worked in your field, but they need to possess the essential skills for your business to survive and outperform.
Create Value for your Investors
Most times, business plans are written to be presented to potential investors who want different things from your business. While one investor might want to be put as an associate on your board of directors, others do not want to be involved with your day-to-day activities. Regardless of what your investor chooses, one thing is common to all investors – they want to know when they can get their money back and how much ROI to expect. Your plans on creating value for investors will also guide you in creating an effective business plan.