Five Tips For Creating Your Best Business Plan
A business plan is a written document that describes the nature of your business and the product or service you provide. It should include an executive summary; descriptions of your marketing strategy, management team and financial plans; and supporting documents such as tax returns, cash flow projections and lease agreements.
Many books and online articles offer step-by-step instructions for putting together a business plan, and you would be wise to consult them for specifics about form and content. Get started with these five tips:
- Choose a flexible format, and be prepared to change yours as new facts emerge and early ideas are rejected in favor of better ones. Use 8.5” x 11” paper and package your plan in a binder that allows you to easily add, subtract and revise as needed.
- Be thorough but concise. Tell your business story as clearly and concisely as possible. Potential investors want hard facts not flowery language.
- Do your homework. Business plans are used for a variety of purposes, not the least of which is to entice investors and secure financial backing. Prove that you know your stuff: identify your target market; tell how your product is unique or how your service differs from the competition; provide details about your competitors’ strengths and weaknesses and estimated market share.
- Turn features into benefits. What potential investors really want to know is “What’s in it for me?” So tell them. Focus on benefits rather than features, and use facts to back up your claims. Instead of “ABC product is priced less than its closest competitor, XYZ,” try this: “By pricing ABC product 20% below XYZ, we’ll turn a quicker profit and you’ll recoup your investment within six months.”
- Make it personal. Introduce your management team. Describe their previous accomplishments and show how they’ll bring their talent to this new venture. And share your plans for attracting additional high-quality personnel as your business grows.