In our second guide for start-up businesses, we’re turning our attention to the all-important business plan. This is the mainstay of getting your business off the ground. It focuses your attention, sets goals and ultimately helps you secure funding.
So that you get the formula right and you’re on a winning streak from the start, we’ve put together five handy tips to ensure your success.
1. Honesty is the best policy
You are naturally going to want to show your potential investors the best of what you can do, and it can therefore be very tempting to overestimate the figures in your business plan. Avoid doing this at all costs as it can come back to bite you further down the line. If you miscalculate the time it takes to make a profit, you are likely to have future cashflow issues. Being honest and conservative with your predictions will earn you more respect from investors. This will prove you are realistic about running your own business and you won’t have to deliver constantly on forecasted high sales volumes.
2. Show off everyone
In order to kick-start a new business, you’re going to have to demonstrate that your business has rock-solid foundations and your staff the necessary skills to run it. So this is the section where you show off yourself and everyone else who is going to be working for you. Highlight specific skills that people have and don’t forget to include outside resources such as mentors, accountants and solicitors as well as day-to-day staff. Mention any recruitment plans you may have as this reveals you recognise the need to strengthen and grow the business in the future.
3. Have a powerful and convincing executive summary
The executive summary comes at the start of the business plan. It’s the first section that everyone will read and therefore potentially the most important part of the document. If you get this bit right, they’ll want to read more! You should make the summary a punchy, powerful and persuasive argument for investment in your business. To make it enticing, you need to provide a good understanding of what your business is planning to do, highlighting in particular how and why you can ensure an investor a return on their money.
4. Know your market and the competition
Before you start any business, it’s vital that you know your market and the type of customer you’ll be selling to. Demonstrate within your business plan that you’ve identified your market and how your product or service fits into this. Alongside a marketplace analysis, you should also provide an in-depth report on who the competition is and what your strategy is for outselling them. It’s advisable to show how big a market share each of your rival’s hold and where you hope to gain a portion of the action.
5. Show you have a comprehensive marketing plan
You’ve got a winning idea and you know that you have the skills to bring a great product to market. But to make sure you can make a business out of being the best barista, the best carpenter or the best web designer, you have to include a detailed marketing strategy within your business plan. If no one knows about your business, then your potential customer base will continue to go to the same places they’ve always gone to. A marketing plan will show investors how you intend to attract customers and the methods you’ll be using to do this. Some marketing tools to consider are: a website with comprehensive SEO, online/print advertising, consumer/trade fairs, social media, business networking.