When you are starting up your own business, it is absolutely essential to have a business plan in place. Your business plan is the blueprint for your company’s future. It is the roadmap you must follow and what investors, as well as potential business partners will base their decisions on.
Despite the importance of business plans, the majority of startups fail to put a decent one in place. So, here are some useful tips to make sure your startup avoids or overcomes the most common of all business plan fails:
1. Don’t ignore your audience
You cannot create a business plan with a one size fits all approach. If you create a business plan in this manner, you will find you alienate your actual audience. You need to know who your audience is and what makes them tick and write your plan with this audience in mind, addressing their concerns, as well as their questions as you do so.
2. There is such a thing as too much detail!
A business plan must be detailed; however, you need to be careful that you don’t go overboard on this detail. The plan does not need to include all the nitty-gritty side of things so be cautious of including too much of what you know. Think instead of what will add value to the person reading the plan. If you add to much bumf, you’ll just end up putting the reader off.
3. Do you even know what/who your market is?
Many entrepreneurs are guilty of copying what they find about ‘the market’ on the internet and including this in their plan. This is a big mistake. Every market is different and your business plan needs to reflect your market, and carry details of specific research you have done into it. Investors will be able to tell if you have copy and pasted this section, so pay the market section of your business plan some attention and include specifics!
4. Explain your financials properly!
When you are talking through your financials, you need to make sure you explain everything thoroughly. If you have assumed a specific percentage of revenue growth – explain why and how you expect to meet this. Do you have evidence to back up your predictions? If you do, include it. This is the kind of information that interested business partners and investors will be after. Present the information in an interesting manner, ensuring that you tell a story as you do so.
5. What’s the next step for your business?
A lot of entrepreneurs treat the business plan as a tick box exercise, and glide through it without paying too much thought to each individual section, let alone finishing up by addressing what the plans for the future are. This is a vital mistake.
It is so important to finish up your business plan with what you have planned for your business. What are your next steps? What are your short, medium and long term goals? No investor worth their salt will be interested in a business which hasn’t articulated the future plans for the company in their business plan; it shows a lack of foresight and interest. Don’t make this mistake.
It is crucial that you keep in mind that your business plan will never be 100% complete and that it is a live document which will need to grow and adapt as time moves on. Having a solid structure in place in the form of your business plan will help you, so be sure you don’t underestimate your its importance.