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However you expect to write your business plan, keep these five points top of mind:
1. Put Your Audience First
Most business plans are written for an audience. The most common audience is investors and lenders. Another audience might be your employees.
Make sure you write your plan with your key audience in mind. For example, if you are writing for venture capitalists (VCs), make sure you cater to their needs. For instance, VCs are very time constrained. So, make sure the first paragraph of your plan clearly states what you do and gets them interested. Likewise, VCs generally only fund companies who have the ability to scale to revenues of $100 million or more in five years. As such, your business plan must show how your company can attain such as feat.
2. Keep Your Business Plan Brief
Your business plan can never, nor should ever, answer every question your reader might have. Such a plan would be too lengthy, and no one would want to read it.
Rather, your business plan should cover the main points of your business, interest the reader, and show you have fully thought through the opportunity. One of the key goals of your business plan is to create enough interest for the investor to schedule a meeting with you. During that meeting they’ll ask you all the specific questions they have, some of which will not be covered in your plan (which is fine).
3. Sell, but Don’t Oversell
When used as a tool to gain investor and lender interest, your business plan is essentially a sales or marketing document. As such, it should get the investor excited, much like a brochure for a new automobile gets the right consumer to want to learn more and/or purchase it. Now, while your plan should excite the reader, be careful not to oversell and particularly not to load your business plan with superlatives. For example, saying we have the best technology, a world-class management team, incredible employees, etc., can often take away from the credibility of your plan. Unless of course, you can provide hard facts supporting each of these claims.
4. Don’t Downplay Your Competition
When entrepreneurs are launching new businesses, they often state they have no competition. Since they think what they are doing is completely unique.
However, most investors think that if you don’t have competition, you may not have a market. Specifically, if customers aren’t currently purchasing a product or service like yours, maybe there’s no demand for it.
In most cases, you at least have indirect competition, or other firms serving the customer need with a different solution than yours. And in many cases, you do have direct competition.
In either case, address who these competitors are in your business plan. And don’t dismiss your competitors as being poor or unworthy. Because if they are still in business, they must be doing at least something right. Also, putting down competition could hurt your credibility.
So, be sure to state what your competitors are doing well, and then highlight reasons why you think your organization can beat them.
5. Envision the Long-Term But Plan For the Short-Term
Your business plan should state your long-term vision for your company, which typically is five or more years in the future. But since it’s impossible to plan that far out, you should create more concrete plans to achieve your goals for the next year.
Specifically, determine what you must accomplish in the next year to put your organization on the right trajectory to hitting your five year goals. Then, in your business plan, break out the current year’s goals into smaller pieces. For example, show what your key goals are for each quarter of this year. If you have multiple goals that overlap time-wise, use a Gantt chart to best show them.
The right business plan often means the difference between raising funding and not raising funding. And it’s often the difference between achieving and not achieving your business’ goals. So, be sure to keep these tips in mind when writing your business plan so you attain success in both these areas.
And, if you need help, a business plan template or business plan consulting services can reduce the time it takes to create your business plan, and help ensure it’s of the highest quality.
