5 Keys to a Great Business Plan
In addition to being a requirement by financial institutions to obtain funding for a new or expanding venture, business plans offer many additional benefits to the business and its owner. Are you clear on what your business does, where it will go and how you will get there? A well written business plan can guide you, hold you accountable and make sure you are not going off on tangents along the way. A business plan written for our own benefit can provide you with crucial knowledge about your business, the market and your competition, knowledge you would otherwise not gain. While a business plan, written for a financial institution needs to follow many rules and regulations, a business plan for your own business can be a simple, very short document that defines your purpose for being in business.
The five tips below will help you develop a well thought-out business plan that potential investors notice and will benefit your own business at the same time.
1. PLAN AHEAD
The mistake most business owners make when writing a business plan is to rush the development of the document. Procrastination is the number one killer of a well developed business plan. You will not be able to develop a well thought-out document if you wait until the day before your meeting with the potential investors. Develop a plan before you need it and keep it up-to-date with regular reviews.
2. DO YOUR RESEARCH
Market research, business intelligence and SWOT analyses need to be performed if you want to be successful with your business plan. Be prepared to answer questions on how big your market is, who your target market is, what consumers are looking for when they are dealing with you, how much consumers are willing to pay for your product or service, and who else is offering similar products or services. You will not be able to answer these kinds of questions without properly researching your market through the Internet, industry organizations or phone calls.
3. DIFFERENTIATE YOURSELF
After you have done your research, you need to differentiate your business, product and service. Investors are not interested in putting their money into Me-Too organizations who have nothing different to offer than an already well established competitor. Lack of differentiation leads to price competition and eroding margins, making it more difficult for investors to achieve a positive return on their investment. When differentiating your product or service, make sure you are differentiating yourself with valuable arguments that your customers care about.
4. KEEP IT REAL
A major part of your business plan is your sales forecast and other financial projections. When developing your projections make sure they are as realistic as they can be. A conservative forecast backed up with a detailed plan on how you can achieve these numbers is more valuable to investors than a pie-in-the-sky projection that lacks any footing in reality. When you develop sales figures, translate them into the number of customers you need and explain where these customers will come from. In other words Your Marketing Plan should back up your sales forecast.
5. THE HEART OF YOUR PLAN: EXECUTIVE SUMMARY
After you have written all your essential parts of the business plan, set aside sufficient time to write an executive summary that crystallizes all the essential elements of your plan. Put yourself in the shoes of your investors. They review dozens of plans every day and most likely only read executive summaries. It is absolute key for you to grab your reader’s attention with the executive summary.
Sieber Consulting specializes in the development of great business plans and operational systems for small businesses. Visit us at www.joergsieber.com to learn more about our services or contact us to see how we can help you tackle your operational issues.
Joerg Sieber studied Hotel Management in Europe. He completed his Bachelors and Masters degree in Marketing and Venture Management at the University of San Diego.
What followed was a career in Strategic Marketing for several Telecommunications Giants for nearly a decade. Joerg helped develop and implement many strategic systems from Sales Forecasting Models, to Market Size Models and Business Intelligence Processes. In He has spoken at conferences around the Globe and trained hundreds of sales people in nearly 30 countries on positioning of products.
Since 2005, Joerg has been using his expertise to work with small business owners. Sieber Consulting is focused solely on the implementation of operational systems and processes to help business owners build companies with a solid foundation through customized, easy to use solutions.
Visit his site at www.joergsieber.com to learn more about the services of Sieber Consulting.
