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If you are looking for funding from investors or a bank, or any other financial instutition, for your start-up, odds are you must write a business plan. Perhaps you are competitively pitching for a place on an incubator programme for start-up businesses ? Then you will most likely be asked to submit a business plan for your business. Unless you are a serial entrepreneur, its unlikely you will have written one before.
Want the bad news? People who are in the business of reading business plans read them a lot. They recognise the gems from the duds, and the winners from the dreamers.
Here are my top tips for producing a credible and readable business plan.
- Define your Industry
Maybe your industry is AI ? or green energy ? or biotech ? or maybe plain ol’ software. Guess what ? your reader may not be an expert in your industry. In fact they may not understand it at all. They are experts in business planning and strategy. They are not industry experts. So if you assume they understand your industry and how it works, you may lose them before they even get to the juicy parts. The business plan they reviewed before yours might have been in an entirely different industry. Yours might be the 10th business plan they have read that day. If I don’t understand your industry, your business plan won’t make complete sense to me. Don’t make this avoidable error.
- Align Your Sales Team to Your Financial Projections
Don’t claim you are going to turnover $1m in revenue in year one with just one sales person. Don’t claim you are going to get most of your sales in one continent, if you are based in another or speak another language. Don’t claim your sales channel is online only, if your sales team have no background in online sales. Don’t claim you will attend the leading expo in your sector if it’s located across the globe and your financials expose that you cannot afford to attend it. I will check the experience of your sales people against how you say you plan to hit your sales target. It must be credible that they have a chance of achieving your financial goals.
- Know your Competitors, and Your Strengths and Weaknesses against Theirs
Here are the two rookie errors when it comes to competitors and business plans. Number one is claiming you don’t have any. Number two is not understanding enough about them. The former gives you instant “idiot” classification for any business plan reviewer with little chance of any comeback. The latter shows a fatal arrogance, as well as a missed opportunity to better position your own business against theirs.
- Tell a Story
A good business plan is a clear, logically flowing story with a beginning, a middle and an end. The best ones are compelling. Yours is not expected to be compelling. They are rare. But to make it to the next cut of attention, at least help me understand it without having to read any section twice, enjoy the read and half believe you.
PS I know I don’t need to say itemise call out ‘use spell checker as a tip’ – do I ?
Want me to review your business plan ? (link to services)