You need a plan
Starting up a business is no easy task, but it’s unfortunate that there are many people in the world that insist on making it difficult by not having a plan before they start. The biggest issue with starting a company from scratch is consistency; if you don’t have an outline or a plan, then the ideas in your head will constantly change and it will eventually reach a point where your current idea is just a shade of your initial concept.
This can result in a lot of issues later down the line such as expensive changes that require a refocusing of business resources or delays in delivering your products to the audience that crowdfunded you. So in this article, we’re going to walk you through step-by-step on how you can write a comprehensive business plan that will help you start your company from square one.
Tips to help you write a business plan
Before we start, it’s vital that we talk about how you should be writing your business plan. These are some basic rules that you should absolutely follow or else it could cause major issues while you’re putting together your ideas.
1. Take your time
Don’t rush your business plan. Business plans can take weeks, months or even over a year if it’s an extreme idea or something that has no data that could be used to gauge its success. If you’ve come up with a completely original idea then there are no statistics or sets of data that can help you make predictions on your business, hence why it’s going to take a lot more time before you can iron out all the potential problems in your business plan so that you don’t hit a dead end in the future.
In short, write slowly, think carefully and revise your plan hundreds of times before putting it forth as a proposal or even showing someone.
2. Keep it short, don't waffle
A comprehensive business plan can be short as well. Make sure you’re revising your business plan by shortening it and removing anything unnecessary that is just taking up space. No one is going to want to read a business plan that is over a hundred pages long even if the text is large and it has a lot of pictures. Keep it as concise as possible so that you can give your business plan to others without forcing them to read hundreds of pages or more of your content.
The more you revise your business plan, the more concise it can be and thus the more to-the-point it is. Go over it with a fine comb several times before you remove every unnecessary statement and word and make it as compact as possible.
3. Write for the audience of your plan
A business plan is typically given to investors so that they have a better understanding of your ideas before investing money into your company. In this case, your investors are your audience and you need to write with them in mind. This means avoiding any unnecessary jargon, explaining concepts that might be the norm in your industry that they might not understand, and avoiding acronyms when possible unless they are explained beforehand or at least once at the beginning of the text.
However, if your business plan is purely for your own needs or for people that you plan to get on board like other staff members, then a business plan can include acronyms since your audience will likely understand it.
4. Break it down into small steps
No one is expecting you to write an entire business plan and revise it in just a week. You can take your time and break down your business plan into several smaller steps, such as outlining it with a general guide and then revising the guide before you start putting in several paragraphs per section. As long as you break it down into smaller sections and take on individual tasks one by one, you can easily create a comprehensive business plan without tearing your hair out.
The most important thing is to not be intimidated by a business plan. Yes, it’s a large document that will require several revisions and a lot of serious planning, but as long as you’re willing to break it down into smaller steps, it’s much better in the long run.
5. Be realistic
While investors love good ideas, they can smell exaggerations from a mile away. If you’re not using real statistics or facts in your business plan to convince them of your USP, then you’re not doing yourself any favours. You need to be realistic and often humble especially if you don’t have much experience in running a business.
In short, don’t exaggerate things and be realistic. From your USP to market impact and staff working for you, keep things realistic and you’ll have a much better chance at convincing investors that your business is worth investing in.
What to include in a business plan
Now let’s talk about what to include in a business plan. These are the elements of a business plan that are absolutely necessary and should be included in some shape or form.
Summarize your idea
Think of the summary as your one-paragraph pitch. If you want your investors to actually read everything in your business plan, then you need to write a compelling summary at the start for them to read and understand. If you don’t convince them within the first couple of lines then they’re not going to read the rest of it.
While the opening few lines need to hook the investors, the rest of the summary can be in greater detail. You can also consider writing your summary at the end once you’ve got a good idea of the content in your business plan, but you can also use the summary as a guide to help you ensure consistency in your writing.
Your unique selling proposition
If you’re starting a new venture then it should ideally be different. This is why it’s important to talk about your unique selling proposition (also known as your USP). If you’re not capable of standing out from other ideas, then investors have no real reason to invest in you–they’ll just invest in other businesses that are already established.
This is where you should talk about what you’re selling, how you’re planning to solve the problem, what you do differently and how you plan to grow your audience. You should also briefly touch on competitors that exist and what you’ve done to research them for a better understanding of the market.
A roadmap will help you stay on course when it comes to prioritizing tasks. You should have a good idea of how you’re planning to turn your USP into a fully-realized product and you should have some idea of how long it will take you to finish a certain task and where you plan to go after your initial idea is out there.
A roadmap should explain everything from the writing of your business plan to at least several years into the future. Be realistic here as saying you’ll sell a million units at the end of the first year is highly unlikely and you’ll be ridiculed for it.
You also need to think about how you’re planning to fund your business. Whether it’s approaching investors, using your own money or even looking for crowdfunding options, there are plenty of ways to secure the money needed to start your business, but you do need to write down how you plan to obtain the funds needed for your business.
You should also include expenses such as the cost of hiring staff to how you plan to pay for the production of your product or the services needed to keep your business running. This should ideally be linked to your funding and how much you plan to spend in order to be consistent with loan requests.
Investors will need to see who is working on your team, what their credentials are and the roles you need to hire in order to become a fully-functional business. You should use the company summary to list the people who are currently working for you and also give an overview of your location and history if applicable.
A company summary can impress investors especially if you have individuals working on your team that are decorated or well-known in the industry. While this is unlikely if you’re starting up a new venture, it’s worth highlighting any achievements and credentials that could convince investors that you have a strong team to start your business.
Some final words
Writing a business plan can seem daunting, but it’s really not as difficult as you might think. The aim is to break it down into smaller steps and follow the tips we have in order to create a comprehensive business plan that you can rely on and use as a document to convince investors that you know what you’re doing.