8 Helpful Tips For Making A Strategic Business Plan
The first key step in creating a new company is to create a solid business plan. The primary goal of the business plan is to entice investors to invest in your company. Without capital from investors, a fledgling company cannot get off the ground. Unfortunately, many entrepreneurs do not put enough time and effort into their business plans which can result in a huge loss of opportunity. However, the good news is that there are best practices which every business plan can benefit from. Here are eight tips for making a successful strategic business plan.
Keep Your Company Overview Clear And Concise
The first component of a business plan is the company overview. The company overview is supposed to give a clear and concise description of the company’s purpose. Many entrepreneurs go wrong by giving an unclear or boring overview. Remember that the goal of the overview is to attract people to invest in your company. Therefore, your overview needs to specifically state what the purpose of the company is in a compelling manner. Otherwise, you will lose people’s attention before they finish reading your business plan.
Make Sure To Proofread Your Business Plan
A business plan riddled with spelling and grammatical errors is unlikely to attract any investors. Therefore, it is important to thoroughly proofread your business plan. It is also a good idea to have other people review the plan to make sure you didn’t miss any errors. Remember that investor’s capital is limited so savvy investors want to see a professional presentation.
Explain Why Your Company Is Different From Competitors
No one wants to invest in a new company that does not bring something new to the table. Therefore, your business needs to make a strong argument about how your company is different than its competitors. Ideally, your business plan should also show potential investors how your business is better than competitors. Do not make the mistake of assuming that you have no competitors. Investors will not buy into that story.
Show How You Are Going To Make Money
Potential investors are very concerned with how your business will make money. Therefore, you need to lay out a clear explanation about how your company will earn income. Develop a cogent business model that explains what markets you will sell to, who your target customers are and how you will manage your expenses. Being vague about how you expect to earn money will scare investors away.
Present A Reasonable Growth Strategy
Investors will also want to know what your growth strategy is over the near, medium and long term. Therefore, your business plan will need to address your company’s growth strategy. You will need to spell out what your growth expectations are and how you plan to achieve them. It is imperative that your growth strategy is not perceived to be overly ambitious or unrealistic. Investors will run for the hills if they believe that your growth assumptions are too aggressive or impractical.
List All Relevant Risk Factors
It is crucial that your business plan discusses what risk factors your company will face. Include a discussion about regulatory, market, credit and competitor risk factors. Investors want to know that you have thought about and planned for downside scenarios. Do not make the mistake of skipping a discussion about risk management.
Discuss Your Potential Funding Sources
Lay out all of the potential funding sources for your company. Although the purpose of a business plan is to attract funding, potential investors will want to see that you have contacted banks and other lenders in an effort to secure funding for your company. The more sources of funding that you line up, the easier it will be for you to convince new investors to buy into your company.
Introduce Your Management Team
Although you don’t need to have your entire team set in stone, having a management team in place will show investors that you are serious about getting your business off the ground and running. They will be particularly impressed if you have assembled a well-qualified management team to run your new company.
Writing a solid business plan is not easy. This is precisely why many entrepreneurs end up creating a shoddy one. However, the payoffs of creating a clear and concise business plan are exponential. If you put in the time and effort, you will ensure that your company gets started on the right financial foundation.