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Many people panic at the thought of writing a business plan; it sounds very formal and can be a daunting prospect. The fear of knowing what to include and what template to use (there are so many!) can be stressful.
As an entrepreneur with a creative flair for new ideas, writing a business plan is likely to feel completely alien to you - dull and far removed from the reality of actually running a business. Well, here’s the thing, a business plan is as much for YOU as it is for the audience you are presenting it to. Writing a business plan will provide clarity and vision to help you achieve your goals. It will ensure you’ve actually thought about every aspect of you’ve your business; your competitors, target audience, distribution, marketing and other fundamentals that could help or hinder your success. You could consider writing two business plans, one with a formal tone and one with a more passionate feel to it (the latter being specifically for you). Either way, remember the real goal of a business plan is to demonstrate you are an entrepreneur fully equipped to take on the world with your business, you’re more than a dreamer you’re a doer. A business plan is a statement of intent; of your goals and missions, of the competition and industry you are entering, of your business strategy. The style and format of your business plan should be tailored to the audience you are writing it for. If you are going to a bank for funding, then you should stick to a formal business plan (summarized at the end of this article for you). If you’re pitching to a business angel, you may wish to adopt a slightly different approach. Angels want to hear and see passion from you about your idea/business proposal, so you should think about how you could incorporate this into your business plan and make it a true reflection of you and your goals. Remember, a successful business on paper doesn’t necessarily translate into a successful business in real life, so don’t worry too much about producing the perfect business plan. The key elements to include are:- - A full financial model
- A marketing plan; including strategy, competition and product positioning
- People management (including you)
- A 2-5 year projection for the business
Whoever you are pitching to for funding, you should be able to demonstrate a complete knowledge of the industry you are looking at entering, including competition, target market, challenges etc. Knowledge is power and if you can competently and confidently talk about your business with real passion and enthusiasm, you’ll win the investors over every time. If you panic, flounder and are unable to answer numerous (all brought on by lack of insight and preparation) questions pitched to you, well I’m sure you can deduce the outcome. The real purpose of a business plan is to demonstrate to investors that you’ve actually thought about your business, you have a clear vision and you know the challenges and possibilities. A formal business plan should include the following:- - This is a summary of your business plan, highlighting the key points of interest and value. It should be concise but not superficial. It needs to grab the readers attention, so needs to be interesting – think in marketing terms ‘AIDA’, Attention, Interest, Desire, Action. The aim is to get the investor to go through all of these states, resulting in the desire to invest in you.
- Company Overview and Strategy
- This should include the objectives, mission and feasibility of your company
- The Price - detail what you plan to sell your product/service for and why you have decided on the price point outlined.
- The Product - define your product and why you think there will be demand for it; include how you are going to develop it. What are the USPs? (Unique Selling Points)
- Place – state your distribution plans; how are you going to sell your product?
- Promotion – how are you going to promote your business? Think about your communications plan in terms of advertising, direct mail, merchandising, brand awareness
- This should be as detailed and up-to-date as possible – their products, customers, distribution, service, known strategies.
- What is the size of the market you are looking at entering, trends, influences, threats?
- What is the target audience? Where do they live? What do they do? How old are they? Male/Female bias?
- Include yourself in this part.
- Detail other members of your team, their skill set and the value they bring to the business (experience is of great value)
- Training required?
- Include forecasts, cash flow and funding.
Remember nothing is set in stone; there is no perfect template. But, if you know your market, product, finances and competition and have oodles of passion and enthusiasm, you’ll stand out as a professional rather than an amateur.
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