A business plan is like the foundation of a building. A good business plan will pave the way for future success. Here are five tips for crafting the perfect business plan.
1. Tell your story
In order to convince investors and inspire them to fund your plan, you need to provide a human angle by harnessing the power of storytelling. Hook the reader by describing how your idea came about, what drives you and your vision for the future. Stories have been shown to activate up to seven parts of the brain, making them more memorable, emotive and persuasive than dry data.
2. Break it into three
Without the right structure, your business plan will fall short of the mark. Brevity is important so be concise – stick to about 20 pages. After your executive summary and product information, break your plan down into three main sections: analysis, action plan and projections.
Your analysis should cover your audience, the market and your competitors. Next is your action plan, which should address your team, operations and sales and marketing. Finally, highlight your traction and projections, e.g. current position and five-year growth plan.
3. Be specific
Vague is not a word synonymous with a successful business plan. The ones that secure investment and guide a workable business model back up every statement with specific details.
For instance, don’t just say you will target under-35s. Describe who they are, what they do and what drives them to buy. Don’t simply mention you will produce ‘x’ amount of product or promote yourself online; include details about who will do it, how they will do it and give a realistic timeline. And when you ask for funding, be sure to explain exactly where all of it will go.
4. Say it visually
When people envisage a business plan, a text-heavy document often comes to mind. However, the most effective business plans today are visual because pictures and graphics are much more engaging.
According to a study by the Social Science Research Network, 65 per cent of us are visual learners. In addition, the brain processes visuals 60,000 times faster than text. By using images to show your product, graphics to depict timelines and graphs to show projections, the information will be easier to digest.
5. Base figures in fact
If your numbers are not well researched, your business model will flounder. Although it might be tempting to convince investors of the viability of your idea by overestimating your sales or underestimating costs, it will lead to problems later as the numbers will be unrealistic and therefore create major upsets for your business.
To avoid this, be sure to base all your numbers in fact. For example, rather than making an educated guess about your future incomings, find a similar business and use their growth figures as a guide. One of the main reasons businesses fail is due to poor cash flow management – don’t be one of them.
Consider creating your plan as a pitch deck so it can double up as a presentation when needed. Follow these steps to craft the perfect business plan and your idea will have a much better chance of getting off the ground.