Writing a business plan is one of the most essential actions to complete when setting up a business, here I give you my 4 top tips.
Watch this video on YouTube: https://youtu.be/uMjWtYzwhoM
Buy a copy of my #1 best selling book, Online Business Startup from Amazon.
The business plan is an important document that will be useful for you to refer to in the future. It will outline your future aims and objectives and be no more than 20-30 pages of well-structured content
25% of businesses fail within their first year, 95% of those businesses fail because they haven't bothered to write a business plan. It is a document you’re going to refer to in the future, because it is going to document your short, medium and long-term goals as well as aims and objectives of your business.
What it allows you to do is outline the aims and strategies for your business during those time periods.
There's a common misconception that a business plan is purely for acquiring funding. However, you want to use it as a tool to give accountability to yourself to make sure that you're hitting your key performance indicators for your business.
You can use it to get funding for bank loans and venture capital especially if you're a startup. You've got to use this as a document to outline the plan for your business and take ownership of that.
Make sure you keep your business plan down to 20-30 pages of very well-structured content. If you're writing 100 page white papers, you're making a mistake. An investor is going to be looking at this document and is going lose interest after the first 20 pages if it is too long, so keep it nice, short and succinct.
Market research helps in the development of a marketing plan and allows you to identify your target market and the barriers to entry such as your competitors.
A business plan is designed to help you and an investor identify with your target market. If your target market isn't clearly identifiable, you have got nobody to sell your products to. Your market research allows you to develop a marketing plan for your products moving forward.
If you don't have time to go out there and conduct market research yourself, there are websites where you can go and buy market research documentation. If you don't have time to do the research, buy a document which has all the key performance indicators for your marketplace locked into it.
It's worthwhile to identify who your competitors are and what the barriers to entry are in your market. A barrier to entry might be time, or cost, or quality-related, and is going to prevent or make it much more difficult for you to sell your products and services into the market.
Identifying those barriers to entry means you have a clear goal that you've got to overcome in order for your business to achieve scalability and growth.
Your forecasts must be accurate and based from factual research and market intelligence
Make sure that your forecasts are realistic and accurate to start off with. I've seen a lot of business plans where years one and two the business is making a very moderate kind of income, and then by year 3 they've got this multimillion pound international business. Realisticly, only the unicorns, the Facebooks, the Twitters, the Googles are the types of businesses which have those types of J curve trajectories.
What you want to do is create a grounded document that means that after year one, when you check back on your KPIs, you've achieved your targets. You don't want to be miles away from that million-pound goal you've set yourself, make sure you forecast is realistic.
Make sure, based on the market research that you've identified in my earlier tips, if the market is only big enough to sell a thousand widgets, you don't want to be creating forecasts based on selling 10,000 widgets because there just isn't the market out there for that volume of product sales.
I'd advise getting an accountant to help you with your financial and cash flow forecasts, because they will have a very clear understanding about how overheads work within the business, and the differences between gross and net profit. An accountant can help you out on a practical level and look at how realistic those financial forecasts look.
It is a great idea to brand your business plan as it will make it look professional which will be crucial when looking to acquire funding from investors.
Apply your company branding to your business plan. It makes it look more professional, rather than having a document which is thrown together using Comic Sans and Clip Art.
If you had a brand created, it means that you're serious about your business. You're trying to build a business you want to sustain for a number of years that has credibility and looks authoritative. Apply your company branding to your business plan and make it look professional.