There are many techniques that entrepreneurs have when writing a business plan that can help to map out the business model, create a strategy road-map and be used to seek investment. Developing an effective business plan can take some effort, but done correctly, can be rewarding for the entrepreneur. The first step in preparing for a business plan is to think about the ‘big picture’ by mapping out the business model. This framework can help to get you thinking about how the pieces fit together to make your business achieve its objectives. The business model is generally broken into:
1. Other companies or people than yourself and why you need them to build your company.
2. What activities your business does to fulfill a market need and customer demand.
3. What resources you need to start-up and continue your business operations.
4. The key value proposition that your company offers, ideally unique and better than competitors.
5. Who your customers are specifically and how your will build/maintain relationships with them.
6. The financial structure of your business, where you will get your money and how you spent it.
Once you have a solid idea based on your research around speaking with potential customers through focus groups, calling and interviews you are ready to begin your plan. The length and complexity of the business plan depends on the objectives it is fulfilling. If you are seeking a simple concept road map, a 10-15 page should suffice. However, venture capitalists usually have requirements that business plans must meet in order to be funded that can make them run 20 pages or more.
When writing the plan, keep in mind where you want the business to go and think small to begin. Many new businesses will try to scale-up too quickly or focus on the end result, but skip how they will get there and the necessary steps to achieve the end result. While it is important to think about the big picture to include everything with the business model, remember that you need to grow and the business plan is often a road-map how-to. Like a good road-map, it helps to be detailed and specific, but not to the extent that the directions are rendered a waste because they fail to communicate main points.
It is also important to write the plan for the audience you are communicating it to. Do not fall victim to expecting your audience has the same background knowledge as you. We often find that someone’s business plans can be unclear and in many cases, writers place an unequal emphasis on subjects of their backgrounds (e.g. technology) and neglect other parts that are important. In order to test this, try providing your business plan to a friend that is not familiar with the business and test how clear the person’s understanding of your business is.
Remember to use accurate and verifiable research to support main points, communicate identified trends, market growth and the customer base. Focus groups, government data and industry reports are perfect for this and are generally low-cost. There is a lot of free information on the Internet, but ensure that the source is reputable, or it could doubt the validity of your business in consequence. Writing an effective business plan takes time and effort, but focusing on the points outlined in this article can help guide you towards a more successful end-result. Stay motivated and be conservative when possible, starting small and thinking big.
For more information on how to write a great business plan, contact business plan writers for help.