“What is your business plan?” These five words tend to give entrepreneurs sleepless nights and cold sweats. In reality, creating your business plan outline should not be a monumental task. Think of your business plan as a road map to help you navigate the best path to success and to provide 3rd parties detailed information about your business currently and into the future. Below is a list of five elements that should be considered when preparing to create a business plan outline. It is recommended that you get your business plan reviewed by an independent financial expert such as an experienced part time financial executive / strategy consultant, as sometimes it takes an independent review by someone who is not directly involved with your business to give you the most objective feedback
1. Define Your Business Model.
One of the key ingredients of a winning business plan is defining a robust business model of exactly how the business aims to serve to create and deliver value for its customers and stakeholders. The business model speaks to both the WHAT and HOW of delivering value to the customer. One of the foundation elements of a robust business model is defining the value proposition of the business and how this value will then be delivered to the customer. Often, businesses tend to pick an arbitrary price point for selling its offerings, and unpacking the business model correctly ensures that all factors of cost are taken into account so that the most accurate price point is established. Perhaps the most outstanding feature when defining the business model is that it brings new, fresh and innovative ideas to the table and these innovations can be weaved into the way you do business.
2. Perform a SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. In order to perform the most relevant analysis it is recommended that all the members of your team contribute to it, as the most accurate observations come from those people working at the coal face. Have an initial brainstorming session and then refine the discussion to those items / issues that are truly relevant to your business and potential 3rd party investors. The majority of potential investors have seen hundreds of business plans and do not have the time to read realms of meaningless information. Keep the reader’s attention by keeping it short and to the point. Its quality not quantity that is important.
3. Accurate Financial Forecasts
At the end of the day it all boils down to the numbers. The rest of the business plan gives the reader an idea as to how well you understand your business and the environment in which it operates but it is the underlying numbers that are going to bring home the bacon. As a result, there should always be a section that deals with revenues, costs, margins and profits and probably more importantly an explanation of the critical assumptions made in your business plan. These numbers can be high level in the main body of the plan, but should be supported by a more detailed financial analysis.
4. Do Some Good Market Research
As an Entrepreneur, your passion and vision can sometimes cloud your perception of reality. Talk to your customers / potential customers, and by talk we mean verbal communication, not via email / Facebook / Twitter or LinkedIn. Choose customers that you have not interacted with for a while and ask them to give you feedback on your products and services. Ask them to be honest; you will need honesty if your business plan is to be successful. If you can, try and reach potential customers as well. This might be tricky but when you call them, try and not sound like a telemarketer, ask them for 30 minutes of their time. It is vital that you make these phone calls personally, do not get your PA to arrange these as your chance of securing their time will be greatly diminished. If your budget allows, employ the services of a professional marketing research company to scientifically conduct this research and interpret the results.
5. Marketing, Marketing, Marketing.
The identification of your target market is one thing, getting that market to purchase your product / service is another science altogether. Without a good sales and marketing strategy in your business plan it will lack credibility. Imagine the ideal client. Communicate with them on their level. Break them down by gender, occupation, interests, websites, newspapers, what channels they use to keep up to date with news, what vehicle they drive, social network preferences and position within a company. These are just some suggestions. Each company’s ideal client or customer will vary. Armed with this data you will be able to create a section on marketing in your business plan outline and develop an applicable marketing strategy.
Consult a Financial Expert
In most instances you are only going to get one shot at pitching your business to a potential investor. As mentioned earlier, the bottom line numbers is what is ultimately going to entice an investor. These investors are astute business professionals and are experts in analysing business models and forecasts. One inconsistency in your business plan forecast will be enough to create a perception of risk for the investor and can be the difference between success and failure in raising much needed finance. Not all investors evaluate business plans equitably and as such you need to ensure that your pitch is fine-tuned so as to appeal to the category of investor you have approached. An independent financial review by an experienced financial executive / expert is highly recommended. Access to this level of financial expertise is often perceived to be very expensive and unobtainable to smaller businesses and entrepreneurs. The Finance Team has got a variety of part time financial experts on their team, all of whom are highly qualified and possess years of valuable experience.