A business plan is the very blueprint for any company. It illustrates focus, eases interaction and ascertains operation metrics. Hence, it is important to give careful consideration when writing your business plan and particularly if you are interested in attracting prospective investors.
There are of course a great number of resources on the internet you can take advantage of when creating your business plan. In addition, a vast amount of books have been written to help entrepreneurs and business owners with this significant document.
In this article you will find 5 tips we think are essential when writing a business plan.
Clearly define the problem you are solving
When writing your business plan, start by giving a thorough description of the problem you have identified. This can help investors see why there is a need for your product or service.
Example: You have noticed that there are many young people in your neighborhood who suffer from acne. This skin condition, in most cases, negatively affects the self-confidence of a teenager or young adult. Often, they feel ‘different’ from their peers and think they do not ‘fit in’. You want to change this and give those with the condition some hope.
Explain why your product or service works
Before explaining why your product is the answer to the problem, you might need to test your product first.
Example: If you have created a (face) cream to help fight acne, you will have to find some people who would be willing to sample it. It would be disastrous if you put a faulty product on the shelves.
Make a list of all your competitors
Your competitors are those who might offer the same product or service you do. They can be direct or indirect competitors depending on the market. Make sure you list all of them (even the indirect ones).
For example: Your direct competitors would be other companies who sell creams to help alleviate acne. Your indirect competitors might not necessarily sell an acne cream but they offer services that can help solve the problem, such as a dermatologist.
It is also a good idea to list your competitive advantage. What is that gives you the edge over your competitors? Investors will want to know why they should spend money investing in you if products like yours already exist.
Describe the business model
It is important that you give clear details of exactly how you will make money from your product or service.
Example: Where will people be able to buy your product? Will you be selling your face cream to exclusive beauty houses, or will a person be able to walk into a supermarket and find it on a shelf?
When speaking to an investor, you will most likely be asking for his or her financial backing. Make sure that you know exactly how much you will need and why.
Example: Don’t just say you need money to make a face cream. What about the packaging? How will it be transported to the various destinations it will be sold at? Will you need to hire more people to help you make the product?
Investors will want an in-depth report of how exactly the money they give you, will be spent.
Ensure that you spend adequate time on your business plan. Do not rush through any section, no matter how insignificant you think it might be. When you are done, read through it again and again. Make sure that you correct all grammar and spelling mistakes.
We hope these tips will help you write the best business plan!
Written by: Leandre de Bruyn