So you've come up with the next big idea - that's the easy part done. The difficult bit is turning your business dreams into reality, and the first step along this route is writing an effective business plan. A business plan isn't just for potential investors, though - putting the plan together will help you to focus on what you want from your business, how fast you expect it to grow, and how you will measure success over time.
No matter what industry you are entering into, there are some key things you should always consider when writing a business plan.
1. Research, research, research
Any successful business needs to know their market, and thanks to the internet, researching this is easier than ever before. Thisismoney.co.uk have put together a comprehensive guide on how to conduct market analysis, but answering the following questions is a good start:
- Who are your customers? Think about what jobs they have, how much they earn, and how your product meets their needs
- Who are your competition? Look at what similar companies are doing and assess what they do well, what they do poorly, and how they market themselves
- What are the potential dangers for your company? Show awareness of any industry trends that could either threaten or encourage your company's growth.
2. Do the maths
Before you get started on your business calculations, be sure to sign up for our free budget planner to get your personal finances in order. Having a clear idea of your own cashflow can pay dividends in the long run, and will help you to budget for your new business. For the business plan, make sure you have a cashflow projection for the first year of your business. You should have realistic estimates for how much you plan to sell, how much it will cost you, and how much your new customers will pay. For more help on writing this section, see Inc.'s guide.
3. The Devil's in the detail
Think about the customer journey from start to finish and make these details clear in your plan. Consider how the customer will hear about your product, how they will order it, and how they will receive it. For a detailed list of all the questions you should ask yourself when writing a business plan, the Prince's Trust offers a useful guide for budding entrepreneurs.
4. Structure is vital
Business plans should always have a clear, logical structure. Begin with an executive summary that will highlight only the key details and unique selling points of your business. It should be attractive to potential investors, as this will be the paragraph that sparks their interest, but don't be tempted to make unrealistic promises about profit and growth. Remember that everything mentioned here needs to be backed up by the details of your business plan. To get an idea of how your plan should be laid out, Bplan offers hundreds of free templates.
5. The Golden Rule
Above all, the golden rule of writing a business plan is to make sure you answer the question: what makes your business different? By producing a detailed and realistic business plan, you and your investors should be in no doubt that your business idea has what it takes to succeed.
Posted by Money Dashboard