If you’ve ever felt frustrated by what you should include in your business plan? What would make an investor want to lend you money? You’ve been through it. It seems that the answer is constantly changing based on who you ask.
The issue or the reality is that there’s not a “one fit” solution. This means that the bad news is that even a step-by process guide for making a business plan won’t actually create a plan that is “good.” The good news is that you don’t really need any step-by-step instructions to make your business plan convincing enough to make an investment.
There are a variety of types of formats, and there’s no “universal” length for an ideal business plan. Based on the product or business, it could vary from 10 to 100 or more pages.
The first question you need to be asking yourself is: at which stage is my business? If you’re already earning revenues and you are seeking an additional or even a third round of financing to increase your business, your business plan will become more detailed and detailed, particularly in your financial projections as well as the analysis aspect of things.
If you’re just beginning a new venture and don’t have a revenue source but are looking for investors to help you begin making money with your services or products, Continue studying.
What is most important to know in this instance is that it all boils down to one thing:
sharing an incredible story!
This doesn’t mean you should not present facts in a logical manner and be honest, but in the most important part, be honest. However, you have to put everything you’ve learned into an engaging, thrilling compelling, and engaging story that will make your viewers (potential investors) stay engaged and aren’t bored by the 25th page. It’s not easy to get anyone to read a complete document. Therefore the best you could accomplish is to make the process entertaining and engaging.
I’ve had the privilege to sit at both ends of the table (both writing and reviewing business plans), And here are the seven things that are usually overlooked or erroneously done:
1. Get To The Point Quickly
Everyone is excited about the thought of starting a new venture… therefore talking about one or more things that cause you to feel excited is excellent to do when you are sitting in a coffee with your coworkers or friends.
However, when it comes to reading something from a digital device or paper with your voice off, the endless chatter could get tiring fast.
Consider your viewers as being the most impatient persons you’ll ever meet. What is the best way to structure your words when speaking or writing an e-mail for them? Then add a hint of excitement and pertinent information, and you’ll be able to get their focus.
2. Move Most Compelling Facts To The Top
Alongside making sure that things stay “snappy,” prioritizing information and organizing the business plan around the importance of each aspect will help the reader forward.
The format I’ve found to be most effective is:
1- Brief Executive Summary
2- Company Description
3- Market Analysis
4- Product and/or Services
5- Marketing Strategy
6- Sales Strategy
7- Company Goals & Objectives
8- Management and Operations
9- Competitive Analysis
10- Financial Projections
A few entrepreneurs also will include a request for financing at the conclusion, and some even create separate documents (mostly together with their attorneys) that are known as “Private Placement Memorandum” (PPM). The benefit of not having an application for funding in your business plan is that you’re able to be flexible with regards to whom you share the business plan and the amount of amount you’ll need to ask for. It is easier to modify the PPM in a short time rather than returning to the business plan each time you meet with investors who are different.
The primary idea of the structure I proposed above is that each section sets the stage and is built up to the one that follows. There are many various formats, and you can modify this structure according to the story you’re telling. For instance, you might have an established name on your team who holds an important influence in your field, and therefore shifting to the “management” section (maybe even up to the highest) could be a good idea in some instances. This is all about making readers interested, and the possibility of being a famous person could be a great way to get the task accomplished for you.
3. Create Transitions
This is a mistake that I find myself repeating time and repeatedly. Making transitions between different parts in the plan for the business is a simple method that makes the experience overall more enjoyable and also “tricking” the reader into staying with the plan.
Many business plan writers believe that it’s enough just to “compile” all the information pertinent to their company in the form of one document, no matter what.
The issue is that sometimes the thought of jumping can be confusing and jarring.
Think about your business plan in terms of the kind of story you’d share around the campfire. It’s not like you’d reveal the significant surprise in the first sentence, is it? Also, the way you’d move from one character or plot point to the next is the way you should approach each part of your business strategy.
Do not be afraid to create some cliff-hangers in the middle of certain sections. For instance, when your market analysis finds that a specific gender or age group has a pressing need for which there is no product on the market that can meet, You can conclude the section by asking an inquiry like: how can [your business or product] meet this pressing need and translate it into a profit? Then, you can proceed to your presentation of services and products.
4. Don’t Be Too Flashy
According to my experience, there’s an enormous distinction between sounding professional and self-promotional. The use of too many buzzwords and using too much language that promotes the business plan could become a bit irritating to read and appears to be insincere. This raises the issue of whether the writers of the document are hiding their own flaws and may not have worked “it” out yet.
The attempt to make your presentation look flashy takes away from the factual information and diminishes the effectiveness of the presentation. The old adage “when in doubt, keep it simple” is true. Applies to this.
5. Utilize graphic examples and images
This is a reference to this “making it fun to read” component. No, no… making it fun doesn’t mean making it flashy. This simply means that you shouldn’t attempt to be flashy, which I consider “boring.”
Illustrations and graphic examples must be pertinent to the content you’re presenting. The aim is to give the viewer’s eyes an occasional break to maintain the flow. Think of it like potato chips that you can see… But organic, healthy ones that you can enjoy eating and are still relevant to your healthy lifestyle. It could include pictures from your product(s) web page, screenshots, data from industry statistics, charts as well as others.
Sometimes, there are fascinating research papers or complete studies of specific industry developments that help your argument. Instead of copying and pasting the entire article, you can attach this to the business plan in the particular document that is labeled “Exhibit a),” (b) and (or), and so on. (one per document) and refer to the exhibit by putting a brief paragraph or a summary within your business plans. This way, you give readers the option to look over the file or continue to read the presentation.
The purpose here is to prevent unneeded “inflation.” There are times when more pages are not necessarily more effective! Sometimes, ten pages that hit off the mark can be better than 100 pages packed with too many industry statistics and long paragraphs you wrote by yourself.
7. Put yourself in the Investor’s Shoes
It’s not easy to read your final business plan. Take a step back and view it from the viewpoint of an investor. Consider asking yourself, in a straight and honest manner: would I invest in this? Imagine placing everything in the bank; the car you drive, home, or your entire savings.
You’ll be amazed at how often you’ll be apprehensive and realize that the plan is just not enough yet and that there are some aspects of the terms you’re using you don’t necessarily believe in, that you’ll need to do more study and preparation before presenting the idea for an investor. In the end, it’s not only placing your money at risk and your own precious time and your resources. This could prove disastrous.