Do you need investors? Looking for a loan? Do you want to apply for a grant? Or has the time just come to do a self-analysis of your business? Are you expanding your business? Looking for new markets? Seeking the next level in your business? These are all times that you need a business plan? What are the nuts and bolts of a business plan?
All business plans have more or less the same sections some even have the same content.
However, when they arrive at the investor’s or lender’s table some remain where they are and others pass to the “I’ll read them later” pile or worse still the trash can! So how do you make your business plan readable and memorable for all the best reasons?
Let’s look at what really is at the heart of a business plan. A business plan is a methodology that defines and integrates the activities that are necessary for a business idea to become a company and provides expectations that prove it will be profitable. In other words, it is the hook to get an investor and tell them that your idea is innovative and will be very profitable. Note those two important words: innovative and profitable. No investor will be interested in a company that is not going to be profitable enough to give them their investment back plus a very healthy profit. Now the what could be an interesting word – innovative. For a company to be successful it must have something that is different from all the other companies working in the same market. After all, if your company is going to be the same as all the others, they are hardly going to move over and let you take their customers. No, your company needs to have something different that will attract these customers away from what they buy all the time. So innovative in some way, be it products, business model, or service.
Let’s add another word that you need to prove within your business plan – viable. Your investor or lender wants to see that your company is going to be viable. If you do a Google search about the “Internet Bubble” of circa 1995 you will see that thousands of investors invested and lent to new-fangled internet companies that promised to make them millions of dollars in easy profits. Memories are long and now investors look to see that new companies are going to be viable for the seeable future so that they continue to receive an income stream and have a good chance of getting their loan or investment back.
Your business plan should be a communication tool selling an original idea that serves to attract and convince people that you have the ability to implement the plan by establishing and managing the company.
In the beginning, we highlighted other reasons for business planning. In addition to raising funds, your business plan is also the best tool for you to assess the viability of your business.
So that is the NUTS of a business plan, let’s look at the BOLTS that hold it together:
Professional: Internally it should be well structured with an index, page numbers, headings, and bulleted paragraphs that explain the complex matter. Plenty of graphics break up the boredom of too many words. Externally it should be expertly bound and have a colorful and attractive cover page. It stands to reason that full company details and contact information should also be on the front cover.
Tempting. Written in a way that encourages the reader to assess the possibilities of entering the business. Take care of the writing style, be concise but not brief, and certainly not so wordy that tiredness beckons. Keep to the point, wording extraneous information that does not support your business planning or business model. Avoid jargon and if you must use initials ensure that the first example is spelled out completely with the initials in brackets afterward.
Dynamic. You have to be creative, but with some restraint. It is best if you tell a story but not one that is found in the fiction section of a library. If the business you propose does not invite big flourishes, save them. It can be counterproductive to distract the reader. Creativity is important as long as you highlight something about the business and is there to keep the attention of the reader. Creativity must only be used to paint a picture of how the business will operate in the future.
Accurate. Clarity is fundamental, but so is accuracy and truthfulness about the current state of your company and its future aims. A little bit of license is offered by the reader but they do expect you to be truthful about your figures, customer numbers, and state of the production of your goods.
Ordered. Guide your reader through your business plan and put supporting documentation within the appendix of the report. Although the key information should be in the main sections of the report, in the appendices you can include secondary data, market study results, resumes of professionals, and any letters from a recommendation or favorable reports.
The last big BOLT that will hold your business plan together is CARE. Your business plan is not just something you have to rush through in order to get your funding. It is the description of what your business looks like now and what you want it to look like in the future. Most business plans start at about 20 pages long for a small business set out in the world to a maximum of 50 pages for a business seeking major funding. Whatever the size of your business plan, and please practice writing complex ideas succinctly, it should be written with care – after all a good business plan is a roadmap to company success!