Your business idea will never get off the ground unless you have a sound business plan. The business plan is simply the strategy for a potential company that you present to lenders and investors. It has to make the case for your business idea. Lenders and investors judge your business idea by the plan you present; therefore, it’s very important to get this right. So, here are a number of great tips that will help you create an excellent business plan:
Determine the Target Audience
First of all, you need a consumer base for your business idea. For example, if you want to sell soap, you should first identify people who want to buy soap. You should know your target audience by factors such as location, age, gender, occupation, income range, and so on. This information is necessary to build a customer base. You can use statistics compiled by the government and other authoritative agencies in your business plan. Do not present dubious statistics from little-known agencies. Larger companies rely on managerial consultants like Global Resources LLC for these statistics. You too can get a special analysis from the professionals if you have some money. A specific statistical analysis for your business idea will make your plan more appealing to prospective investors.
Focus on a Niche Market
You might thinkthe broader the market for your business idea, the larger the profits would be. This is not how business works. Generic brands don’t necessarily reap large profits, especially in the beginning. The competition is too much. Therefore, if your business is to be profitable from the get go, it needs to focus on a smaller, but more certain, market. Find your business idea a niche market. Detail this niche market in the business plan. Banks and investors will be more likely to offer you funds if you do this.
Detail the Competition
Once you know your market, the second thing to know is your competition. A good businessperson is also a good strategist. You must know your enemy in order to make a foray into a territory full of them. So, in your business plan, you must present detailed information regarding the other business in the same or similar market as yours. The lenders and investors would want to know your plan for beating the competition once you get the funding. This is essential for any strong business plan.
Avoid Exaggerations and Hyperbole
The business plan is not an advertisement. It must be completely factual and accurate. Exaggerated statements and claims have no place in a good business plan. Save the sales pitch for the masses. Your lenders and investors require only the cold hard facts. Don’t overestimate your abilities or underestimate potential hurdles. It will only hurt your chances of getting funding.
Tailor Your Plan for the Audience
Your business plan might need some tweaking depending on the audience you are presenting to. For example, if you are presenting the business plan to a bank for a loan, the lender will want to know about the risk. So you should have extensive information in the plan addressing potential risks. On the other hand, an individual investor might be more interested in the potential opportunities for your business. So, it’s best to write more than one business plan targeting a specific audience.
If you follow the above tips, your business plan will be much stronger and more effective in attracting various sources of funding.