The key points of the business plan
Do you need investors? Looking for a loan? Do you want to apply for a grant? Or is it simply time to do an introspection of your business? Expanding your business? Looking for new markets? Looking for the next level in your business? Are these all the times you need a business plan? What are the main nuances of the business plan?
All business plans have more or less the same sections, some even have the same content.
However, when they arrive at the investor’s or lender’s desk, some stay where they are, and others move to the “I’ll read them later” pile, or worse, the trash can! So, how to make your business plan readable and memorable for all the best reasons.
Let’s take a look at what is actually at the heart of a business plan. A business plan is a methodology that defines and integrates the activities that are necessary for a business idea to become a company and provides expectations that prove that it will be profitable. In other words, this is the hook to attract an investor and tell them that your idea is innovative and will be very profitable. Pay attention to these two important words: innovative and profitable. No investor will be interested in a company that will not be profitable enough to return their investment plus a very good profit. Now what can be an interesting word – innovative. For a company to be successful, it must have something that is different from all the other companies operating in the same market. After all, if your company is going to be the same as everyone else’s, they are unlikely to move and let you take their customers. No, your company needs to have something different to draw these customers away from what they buy all the time. So innovative in any way, be it products, business model or service.
Let’s add one more word that you need to prove within your business plan – viable. Your investor or lender wants to see that your company will be viable. If you google the “Internet bubble” from around 1995, you will see that thousands of investors invested and lent money to new fad internet companies that promised to make them easy millions of dollars in profits. Memories are long, and investors are now looking to see that new companies will be viable for the foreseeable future so that they continue to receive an income stream and have a good chance of getting their loan or investment back.
Your business plan should be a communication tool selling an original idea that serves to attract and convince people that you have the ability to implement the plan by creating and running the company.
At the beginning, we highlighted other reasons for business planning. In addition to fundraising, your business plan is also the best tool for assessing the viability of your business.
So that’s the NUT of a business plan, let’s look at the BOLTS that hold it together:
Professional: Internally, it should be well structured with an index, page numbers, headings, and bulleted paragraphs that explain complex matter. Plenty of graphics break up the boredom of too many words. Externally, it should be expertly bound and have a colorful and attractive title page. It stands to reason that full company details and contact information should also be on the front cover.
Tempting. Written in a way that encourages the reader to evaluate business opportunities. Be careful about your writing style, be concise but not short and certainly not so wordy that it induces fatigue. Stick to the point by conveying extraneous information that does not support your business planning or business model. Avoid jargon and if you must use initials, make sure the first example is spelled out in full with the initials in parentheses afterwards.
Dynamic. You need to be creative, but with some restraint. It is best to tell a story, but not one that is found in the fiction section of the library. If the business you’re offering doesn’t invite big flourishes, save them. It can be counterproductive to distract the reader. Creativity is important as long as it highlights something about the business and is there to keep the reader’s attention. Creativity should only be used to paint a picture of how the business will work in the future.
Accurate. Clarity is fundamental, but so is accuracy and truthfulness about the current state of your company and its future goals. The reader offers a bit of license, but they expect you to be honest about your numbers, the number of customers and the state of production of your goods.
Ordered. Walk your reader through your business plan and include supporting documentation in an appendix to the report. Although the key information should be in the main sections of the report, in the appendices you can include secondary data, market research results, resumes of professionals and any letters of recommendation or favorable report.
The last big BOLT that will hold your business plan together is CARE. Your business plan isn’t just something you have to whip up in a hurry to get your funding. This is the description of what your business looks like now and how you want it to look in the future. Most business plans start from around 20 pages for a small business going global to a maximum of 50 pages for a business seeking major funding. Whatever the size of your business plan, and please practice writing complex ideas succinctly, it should be written carefully – after all, a good business plan is a road map to company success!
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