One of the challenges facing young entrepreneurs is how to craft a bankable business plan, which could make a potential investor pay attention.
No matter how long you have been in operation, your business needs a clear plan. A good business plan can help you secure funding for your start-up, or expand your operation.
Even if you are not looking for a capital infusion right this moment, a business plan can still be a great deal of help. The process of creating a business plan forces you to look at your business and evaluate what is working — and what is not. It can help you focus on the right things and give you a roadmap to future success.
There are seven elements you should get right when writing a business plan, these include: executive summary, business description, market analysis, organisation management, sales strategies, funding requirements and financial projections.
All of these elements can help you as you build your business, in addition to showing lenders and potential backers that you have a clear idea of what you are doing.
Executive summary
The executive summary is basically the elevator pitch for your business. It distils all the important information about your business plan into a relatively short space. It is a high-level look at everything and should include information that summarises the other sections of your plan.
One of the best ways to approach writing the executive summary is to finish it last so you can include the important ideas from other sections.
Business description
This is your chance to describe your company and what it does. Include a look at when the business was formed, and your mission statement. These are the things that tell your story and allow others to connect to you. It can also serve as your own reminder of why you got started in the first place. Turn to this section for motivation if you find yourself losing steam.
Some of the other questions you can answer in the business description section of your plan include:
What is the business model? (What are your customer bases, revenue sources and products?). Do you have special business relationships that offer you an advantage? Where are you located? Who are the principals? What is the legal structure? What are some of the market opportunities? What is your projected growth?
Answering these questions narrows your focus and shows potential lenders and backers how you are viewing your venture.
Market analysis
This is your chance to look at your competition and the state of the market as a whole. Your market analysis is an exercise in seeing where you fit in the market and how you are superior to the competition.
As you create your market analysis, you need to make sure to include information on your core target market, profiles of your ideal customers and other market research. You can also include testimonials if you have them.
Organisation and management
Use this section of your business plan to show off your team superstars. In fact, there are plenty of indications that your management team matters more than your product idea or pitch.
Venture capitalists want to know you have a competent team that has the grit to stick it out. You are more likely to be successful and pivot if needed when you have the right management and organisation for your company.
Make sure you highlight the expertise and qualifications of each member of the team in your business plan. You want to impress.
Sales strategies
How will you raise money with your business and make profits a reality? You answer this question with your sales strategy. This section is all about explaining your price strategy and describing the relationship between your price point and everything else at the company.
You should also detail the promotional strategies you are using now, along with strategies you hope to implement later. This includes your social media efforts and how you use press releases and other appearances to help raise your brand awareness and encourage people to buy or sign up for your products or services.
Your sales strategy section should include information on your web development efforts and your search engine optimisation plan. You want to show that you have thought about this, and you’re ready to implement a plan to ramp up sales.
Funding requirements
Here is where you ask for the amount of money you need. Make sure you are being as realistic as possible. You can create a range of numbers if you don’t want to try to pinpoint an exact number. Include information for a best-case scenario and a worst-case scenario. You should also put together a timeline so your potential funders have an idea of what to expect.
No matter your business, get an idea of what steps you need to take to make it happen and how long they typically take. Add it all into your timeline.
Financial projections
Finally, the last section of your business plan should include financial projections. Make sure you summarise any successes up to this point. This is especially important if you hope to secure funds for expansion of your existing business.
Your forward-looking projections should be based on information about your revenue growth and market trends. You want to be able to use information about what is happening, combined with your sales strategies, to create realistic projections that let others know when they can expect to see returns.
Even though it can be time-consuming to create a business plan, your efforts will be rewarded. The process is valuable for helping you identify potential problems, as well as help you plan ahead. You will be more organised and better prepared for success.
STEPHEN ONYEKWELU
