The success of any business hinges on how well the entrepreneur has planned for each stage of the business so here are 5 ways to improve your business plan. It is the mandatory requirement when pitching a business idea to potential investors but most importantly, it outlines the milestones the business needs to achieve to break even and stay profitable.
The main takeaway you will learn from the thousands of sites and speakers is that you must clearly show what your business does, expound on the potential threats and weaknesses, the strengths and opportunities you have to counter your shortcomings and most importantly, have your numbers in order.
The vision that the business sets to achieve is another factor that every business plan must have, and it is the single most helpful strategy for first-time entrepreneurs seeking investors. The problem, however, comes when you have a business idea, but you are at a disadvantage on how to write the business plan.
Here are five approaches to improve your business plan.
Write a Comprehensive Executive Summary
Many would-be entrepreneurs fail to capture the attention of their potential investors for they make the mistake of writing a shallow overview of the business while others see the summary as the description of the business. Experts suggest that the details in your executive summary should include
- The primary use of the business
- Prospective outcome
- Purpose of the business
- Amount of the required capital
By incorporating the above particulars in the executive summary or business plan without being wordy, also include the essential elements to help the prospective investor to make a decision in your favor.
Create A Financial Model
After going through your executive summary, a potential investor will look out for your projected numbers. Many entrepreneurs in the early stages of the business may refrain from setting long-term projections, and this hardly works in their favor. It may often come off as guesswork, but 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. Your numbers help investors and potential partners to gain an understanding of your ambition, thinking, and rationalism in the business field.
Define Your Target Market
Humans are a difficult lot to please, and no solution fits everyone. When it comes to developing, and offering your products or services, you must identify a particular group in your community who may need your product or service, and are willing to pay for them.
When a potential investor sees your investment in reaching out on your target market, the funding is as good as yours. The next step is to identify the size of your market and the changes that will affect the size in the future. An investor wants to see an opportunity for growth, monetization, and scalability.
State Your Weakness
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 huge competition in the market. The best way out is not in hiding your weakness in your field of business but to address them boldly.
Inevitably, investors will see through the façade and pinpoint the flaws in your business plan. Do not hide your weaknesses, however, highlight them, and have a plan of how you will overcome each one of them. Investors appreciate a business where the entrepreneur know their shortcomings and have a plan on how to overcome the limitations.
Talk About Your Team
No person is an island, and the best businesses that make past the ten-year mark have one thing in common, they have a 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 to turn it into reality comes off as a business that will hardly get off the ground.
Teams with strong relationships are vital to the success of business, and investors stress this point for startups and emerging companies. Including the aspects of your team in your business plan and you will have high chances of getting funding from investors as well as attracting potential partners.
The best way to improve your 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. In the process of generating your business plan, some areas will need additions while others with your business plan, some areas will need additions while others will require tweaks. The above guidelines will help you improve your business plan.