It is widely accepted that business plans are essential, but few people know what is included in an effective business plan. Rather than relying on trial and error that could cost your startup support and funding, here are the essential elements of a winning business plan.
1. Your business plan must be professional and grammatically correct
A business plan is the first impression most investors and backers will have of your business, and you want to put your best foot forward by ensuring your plan looks neat, professional, and free of errors (two good tools are Grammarly Premium and grammarcheck.ai).
2. Your business plan must be well-organized and user-friendly
Make it as easy as possible for your plan to be understood by organizing it well so that it tells a compelling story. One way to test for user-friendliness is to have someone you trust read it and give honest feedback before presenting it to potential investors or partners.
3. Your business plan must show how the business solves a real problem in a unique way
Not every problem represents a meaningful startup opportunity. If you don’t have a real problem and a superior solution, you don’t have a viable business. Keep tweaking until you get this one right. Marketers call it the unique value proposition, which will be critical to persuading investors and supporters.
4. Your business plan includes a market analysis and marketing strategy
Your market analysis should demonstrate a strong understanding of a realistic target market. Your marketing strategy should include cost-effective ways of getting your value proposition in front of potential buyers in your target market.
5. Your business plan includes goals and milestones
Goals show your vision for the business, and milestones show your time frame for getting there. Investors and partners will want to see both. Write persuasively so that they will catch your enthusiasm for your plan.
6. Your business plan is realistic about competitors
Saying your business has “no competition” is unrealistic and won’t fly with savvy investors or partners. All companies have competition, and your task is to recognize yours, even if you expect to blow them out of the water. A business with no competition is not a good thing – it indicates that there is probably no market for your products and services.
7. Prepare a compelling executive summary
If the first page of the plan doesn’t hook the reader, chances are the rest of the plan will never be read. You must make an immediate, compelling case without sensationalizing or using superlatives.
8. Your business plan has realistic financial projections
Experienced investors will see through rosy projections, so be as realistic about costs and revenues as possible.
Creating a list of items to include in your business plan is relatively easy, but writing a compelling business plan takes a knack for putting words together that not all entrepreneurs feel they have. If you need help creating a winning business plan, Cayenne Consulting has the expertise to take your business to the next level. Contact us for more information.