The development of a business plan is a key component to getting your small business off the ground. A business plan wears many hats in the world of an entrepreneur.
It helps validate the potential of a business idea, lays the groundwork for the management structure, details a marketing plan and budget, describes the types of customers the business will attract, assesses the competition, and is the single most important document when approaching investors or creditors who may provide your business with financial support.
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So, how do you write a business plan that gets the money?
Write the business plan from the investors perspective. In your business plan you should be able to see your business through the investors eyes, and address any concerns of a would be investor. Your business plan should demonstrate you are an expert in your field, and that you have clear goals and a clear mission with your business. Give the investors a reason to lay their hard earned money on your idea, your business, and you.
Have a detailed management plan
Investors invest in management, not just concepts or ideas. Expressing your knowledge, passion, and dedication to your business, as well as the competence of those working around you, will go a long way in establishing the trust necessary to secure investors.
Show the investors you know you customers
Communicate in your business plan an understanding of your target customers. Who are your customers, how you will reach them, how will they reach you, and why do you think your business is fit to serve this market are all questions you will need to answer.
Demonstrate a sound marketing plan that aligns with your target customers
This is one of the most important parts of your business plan. How you intend to reach your target market will tell investors a lot about the potential profitability of your business. If the investors see from your business plan that a huge market exists, but your marketing plan falls short of reaching them, they are going to pass on giving you money (and they’ll give it to the next guy with the same idea, but a better marketing plan). Double check for basics like spelling and Excel errors as well, these look so unprofessional and will turn anyone off immediately.
Illustrate the barriers to entry
You will want to show investors how you will keep competitors from stealing your customers. What barriers of entry are there (for others), and what barriers will your business be creating. They will want to see your strategy for keeping competitors out while you grow your business.
If you develop your business plan to address the above you will be well on your way to obtaining outside capital, and having a business plan that will get you the money! This is a good exercise even if you don’t think you will be requesting outside capital…you’re still writing the business plan for an investor -YOU!