A great business plan hinges on how well the entrepreneur has a plan for each stage of their market. Indeed, it is the mandatory requirement when pitching a business idea to potential investors. However, it outlines the milestones of the business needs to achieve, break-even, and stay profitable.
In this way, the main takeaway we learn from the thousands of and speakers is that show what our business does. Additionally, we need to expound on the potential threats, weaknesses, strengths, and opportunities to counter our shortcomings and have higher numbers in order.
The vision that the business sets to achieve is another factor that every business plan must-have. Also, it is the single most helpful strategy for first-time entrepreneurs seeking investors. Moreover, when we have a business idea, we are at a disadvantage on how to write the business plan. So, here are five approaches to improve our business plan:
1. Write a comprehensive executive summary
Many would-be entrepreneurs fail to capture their potential investors’ attention as they make the mistake of writing a shallow overview of the business. In contrast, others will see the summary as the description of the company. In this case, some experts suggest that the details in our executive summary should include;
■ The primary use of the business
■ Prospective outcome
■ Purpose of the business
■ Amount of the required capital
Incorporating the above particulars in the executive summary without being wordy also includes the essential elements to help the prospective investor decide in your favor.
2. Create a financial model
Secondly, a potential investor will look out for our projected numbers after going through our executive summary. Many entrepreneurs in the early stages of the business may refrain from setting long-term projections, which hardly works in their favor.
It may often come off as guesswork; however, the investors see the effort of planning for:
■ An increase in the size of the market
■ The appreciation in the production and operational costs
■ Fluctuation in prices of products and services
■ The profit margins
From popular television shows like the Shark Tank and Dragon’s Den, entrepreneurs learn that investors need a concrete spending plan of the money they invest. Our numbers help investors and potential partners, such as a qualified business coach, to understand our ambition, idea, and rationalism in the business field.
3. Define our target market
Humans are difficult to please. Plus, we have no time to give a solution to match with everyone. When it comes to develop and offer our products, we must identify a particular group in the society who need our services and are willing to pay for them.
When a potential investor sees our investment in researching our target market, the funding is as adequate as yours. The next step in our business plan is to identify our market’s size and the changes that will affect the future scope. With it, our investor may want to see an opportunity for growth, transformation, and expandability
4. State our weaknesses
Many of the entrepreneurs write business plans and hide their weaknesses to impress investors or partners. It might be that the company may take a long time to break even or a case of enormous competition in the market. The best way out is not to hide our weakness in our business field but to address them boldly.
Inevitably, investors will see through the façade and pinpoint the flaws in our business plan. We can highlight them and plan how we will overcome each of them instead of hiding their weaknesses. Indeed, our investors will appreciate a business where the entrepreneur knows their shortcomings and plans to overcome the limitations.
5. Talk about our team
No man is an island. The best businesses that make past the ten-year mark have one thing in common. They have a business plan, a good team, and a capable business leader. It is a common saying in investor circles that they do not finance a business but invest in the people running it. Having the idea without a team will turn it into a reality that comes off as a business that will hardly get off the ground.
In addition to that, a team with strong relationships is vital to a business’s success, and investors push this point for startups and emerging companies. Including our team’s aspects in our business plan, we will have a high chance of getting funding from investors and attracting potential partners.
Improve our business plan
Briefly, the best way to improve our business plan is to have an open and positive mindset. Most entrepreneurs write business plans to get funding, while others use it to run their business. Similarly, in generating your business plan, some areas will need some additions, while others will require tweaks. Hopefully, those guidelines above will help us in improving our business plan.
This article is written by Lauren Clarke. Lauren writes guest posts for a number of clever brands and media outlets around the world. Lauren loves red wine, bush walks and meditating. You can find Lauren on Twitter.