Important Points to Remember When Writing a Business Plan

One of the most important things that you can do for yourself and your proposed business is to write a well thought out business plan that covers most of the basis.  This will not only help you get finance, but it also serves as a sanity check to ensure that you have done the necessary homework to determine the feasibility of your business idea.

It often happens that you think of this awesome new innovation, only to find that there is already a 1000 competitors doing it or it is not really feasible.

It is important to keep your audience in mind and keep it short and sweet, as the investors that are worth chasing are often busy business people, that will not spend much more than 2 minutes on your business plan before making a decision.  Thus it is of critical importance to make sure that you have a compelling executive summary that makes the following clear:

• What does your business do and what are the benefits?
• Where are your business opportunities?
• Do you or your team have a track record so far in the sector or in business?
• What does your financial projections look like?
• What return can you offer the investor for his investment?

This is the most important part of the business plan and should be done last after all the other pieces of the puzzle is already in place.

The next step would be to give background on your business in terms of your core competencies, what makes your business different from competitors? what makes your business attract customers and what products and or services do you plan to offer.

Next you want to conduct research on direct as well as indirect competitors to get a sense of how they do things, and what you will do to set you apart in an attempt to steal market share from them.

That brings us to the sales and marketing section, here you must explain in detail who your target market is and how you plan to reach them.  What marketing channels will you utilize and how much will the costs be associated with this?  It is also important to add a realistic sales forecast in this section and is often based on that first gut feel that you get, it might be tempting to change these numbers, but don't as this often happens to be the most realistic forecasts.  Other areas to keep in mind here is what will your profit margins be and how will you sustain that?

You should also cover the core skills of your team in an attempt to show that you have the right team to make a success out of the venture, this will also highlight what skills you might be lacking and send you in the right direction to get the best people on board.

And then lastly you will have to do the financials, it is important here to add a salary for yourself as well as a personal statement of equity to show the potential investor that you have taken your personal financial needs into consideration.

You must also have the following financial statements included:

• Cash-flow forecast (5 year forecast)
• profit and loss statement (5 year forecast)
• Balance Sheet

Remember that the better you think and keep these projections realistic the less your financial risks will be going forward.

Have you ever applied for finance to fund a new business finance?  What was your experience like and did you succeed in getting the finance?

Looking forward to reading your comments...