Getting the investment or support you need and writing the perfect business plan takes some finesse. Yet, knowing the right elements that go into a successful planning document or Business Model Canvas can show financiers that you mean business.
It’s safe to say that there’s nothing like a good business plan to get your new startup company off the ground or to expand your current organization. Now more than ever it’s essential to show that you have a firm grasp of the market and a carefully planned operational structure for your new venture.
To help you get started successfully and create the perfect business plan, this article explains 6 important things you need to know before you write your document. Keep reading to discover the critical features that you’ll need to include in your new project’s outline.
Decide Who Your Business Plan is For
There are many people that you can present with a convincing business plan to get them on board.
It’s a common misconception that business outlines only get used to secure finance. Whilst this is true in the majority of cases, these kinds of planning documents aren’t limited just to the money-men and women.
Generally speaking, business plans can be used to convince the following stakeholders to join or fund your company or venture:
- Potential partners
- Skilled employees
- Financial institutions
By having a clear picture of who you are targeting and why you’ll be able to plan the rest of your document more effectively. This important building block will often be your best starting point so the rest of the document can be formed correctly.
Decide What Format to Choose for Your Business Plan
There isn’t a one-size-fits-all approach to a business plan. There are numerous different ways that you can lay out your document template.
What style of business plan you choose ultimately depends on the stage of development that your new LLC, corporation, or venture has reached and how much detail you wish to divulge initially. There are no wrong decisions in which type of format you choose.
The most common business plan formats you’ll normally come across include the following:
- Traditional Business Plans: Longer and more detailed documents that span across several pages
- Agile or Lean Business Plans: More concise and quicker to produce planning documents that give a brief “big picture” view of a new company
Both types of template samples have their advantages and disadvantages. For instance, you may need to produce a traditional business plan at a later date to complement an initial Lean Business Plan you’ve produced.
However, Agile Business Plans can quickly create buzz around your new project and open new investment opportunities. They also allow you to give an overview of your new startup company or expansion project without divulging too many sensitive details or the need to create an NDA.
Select the Right Parts For Your Business Plan
Many key sections can make up a strategic plan. When deciding how to prepare your business plan outline you should determine which essential components it should include.
Effective business plans will normally include a mixture of the following sections:
- Executive summary: A short description or outline of the business as a whole, including the business name or if it operates as an DBA detailing what stage of development it is currently in and why it is well-positioned to succeed.
- Market analysis: An overview of the market sector that you intend to target, this should give information on how you stack up against competitors and the trends you wish to exploit.
- Organization and management: This section describes what kind of business you are running (i.e. partnership or LLC) and how the management of the company is structured.
- Operational plan: An explanation of how your business will function (or is already functioning) on a day-to-day basis, what it will produce and how it will meet its proposed targets for orders and sales.
- Marketing and advertising plan: This segment details how the company will make itself known to customers. It should explain the methods and channels you will use to reach the target market.
- Financial backing: In this part of the business plan you should outline what financial help you are seeking and how much capital has already been put in place by yourself and any partnering investors.
- Financial projections: Last but not least you need to explain how you predict your company will fare financially over the short to medium term. Explain elements like how long it will take to reach profitability and how much you expect to make initially based on logical sales projections.
You don’t have to include every single one of the sections listed. However, you should always feature enough information about the products and services you’ll provide, the market and customers you’ll target, details on the financial necessities of the company, and how your company will be structured.
The structure you choose should always explain as much as possible how your business will run and why it stands the best chance of success. This will allow potential investors and business partners to make a sound decision on whether your company’s plan is the right fit for them.
Using a Pre-Prepared Template Can Save You Time
Creating your business plan from scratch can be tough. Getting a custom-designed template right is often a complicated and time-consuming process for a DIY company outline.
To save time and create a professional template that will look the part, it’s best to use a pre-prepared template. Using tools like LawDistrict’s step-by-step business plan designercan help you easily produce and modify your company’s plan of action.
Applications such as this can help formalize the structure and allow you to try different approaches when deciding what sections to include. They can also quickly help you get a good idea of what an example business plan should look like so you can create a template that will resonate with stakeholders.
For further resources, you can also find some good examples of what expertly prepared Lean and Traditional Business Plans look like on the US Small Business Association’s (SBA) website.
Remember: Less is Sometimes More
A business plan doesn’t need to be as long as War and Peace. Whilst it may contain a lot of detailed information it must be easy to read quickly.
Naturally, you’ll have to strike a balance between information and conciseness. To do this always consider whether the data you include or embellishments serve the overall goal of the business plan.
This will sometimes mean cutting some juicy details from the final template but this is necessary to avoid causing information overload for the reader. Adding too much text will quickly turn off anyone who you might be targeting for investment.
Generally speaking, the SBA recommends a length of around 30-50 pages. This isn’t something you have to stick to religiously as you can make a comprehensive business plan with as little as 10 pages.
Ultimately, as long as the final business plan is logically presented and answers the key questions potential stakeholders may have then a shorter document shouldn’t be an issue.
Make Sure that You Write For Your Audience
As you might imagine, folks are going to take some convincing before they part with their money or time. Therefore your business plan needs to put to rest as many doubts as possible your target investors or partners might have.
First of all, it’s important to write in a language that your future partners will understand. Thus, it’s sensible to avoid technical jargon if you’re targeting investors who don’t possess in-depth knowledge of your market or industry.
This will often mean simplifying the language you use in your document. However, by making the terminology more accessible you’ll be able to reach a much wider audience.
Above all, it’s essential to write using a positive yet informative tone and carefully guide the reader through each stage of the project. The more confidence you can convey to your potential financier or stakeholder the better.
Writing a business plan seems like an arduous task before you begin. Yet, by following the right steps and using helpful tools like pre-prepared document templates you’ll find the process is much easier than you might imagine.