You’ve put a lot of thought into your business idea and you want to make it a reality. You are probably buzzing with excitement, drafting ideas for your logo, thinking about how much you will pay yourself and dreaming about how you will promote your brand. Writing a lengthy, in-depth (boring!) business plan is probably the last thing from your mind, but your business will not be able to start-up without one.
Writing a business plan is one of the most important and essential parts of starting a business. Just because you have a great business idea doesn’t mean that you will reach success. You also need a lot more than just an idea to convince investors that your business is worth investing in.
The following do’s and don’ts will keep you on track and help you write an investment worthy business plan.
1. Don’t procrastinate
The longer you put off writing your business plan, the further away you will push your business success. The first thing potential investors will ask for is your business plan and if you don’t have anything to give them you will be quickly shown the door. While you may understand your business concept inside-out, you need to put pen to paper and write a business plan if you hope to receive any form of investment.
Writing a business plan also takes time, with most start-up businesses spending about 12 months writing and revising their business plan. The sooner you get started the sooner you will be ready to launch, so bite the bullet and get to it!
2. Do check your spelling
It’s not hard to use spell check, just a couple of clicks and your document has been scanned by a digital dictionary, corrections suggested and grammar corrected - so why is it that so many entrepreneurs fail to use this simple tool? There really is no excuse.
Your business plan represents not only your business, but you as an individual, and making a good first impression with investors could make or break your success. A business plan filled with spelling and grammatical mistakes could convey that you haven’t put in much time and effort, that you’re careless, or that you aren’t committed. Definitely not how you want to be perceived!
3. Don’t underestimate your competition
Is your business concept so unique that you don’t have any competitors? Perhaps you’ve found a niche market that can only be served by your product and your product alone? You wish! Every business has competitors and whether they’re direct or indirect, they’re still there. To deny this fact shows that you’re both naïve and unprepared.
Researching your competition is a crucial step in writing your business plan. When you identify and understand your competitors you have the opportunity to strengthen your unique selling point and further position yourself as a market leader. You'll be able to clearly identify not only what you do better than the competition, but also what you do differently, which will help to sell your business to investors.
4. Do be realistic
Nobody expects your business plan to present a flawless landscape, projecting exceptional business success. Investors are well aware of the common pitfalls for start-ups and the challenges faced by new business owners. You can’t hide anything from them, and that’s not the point anyway. Be realistic and honest about the risks and threats facing your business and impress your investors by showing how you plan to counteract them.
Also, be realistic with your financial projections. It’s going to take you a while to get going financially, so your initial projections should be low, increasing over time as your business becomes established. It’s better to be conservative with your financial projections, so that when you exceed them, you will impress both yourself and your investors.
4. Don’t beat around the bush
A business plan is designed to clearly and concisely present the goals, growth projections and predicted successes of your business, while identifying potential risks and your strategies to overcome these challenges. While there is a lot of information to include, you don’t want to lose the reader in and amongst waffle and technical terms. You’re not writing a scientific report, you’re providing information to prove that your business is viable.
It’s also important to keep your reader in mind when writing your business plan. You are going to be showing your plan to banks, investors and mentors and you can bet that very few of these people will have an in-depth working knowledge of your industry. Whilst it’s still acceptable to include some technical terminology in your business plan, make sure you also include the relevant descriptions and explanations so as not to confuse your potential investors.
Still don’t know where to start? If you’re unsure where to start with writing your business plan, or you want to make sure your plan is investment ready, book a place on one of our popular business planning workshops and our experts will guide you to success. View dates.