Do you need investors? Looking for a loan? Do you want to apply for a scholarship? Or is it just time to do a self-review of your business? Are you expanding your business? Looking for new markets? Looking for the next level in your business? Are these all the times you need a business plan? What are the nuts and bolts of a business plan?
All business plans have more or less the same sections, some even have the same content.
However, when they get to the investor’s or lender’s table, some stay where they are and some move onto the “I’ll read it later” pile or worse, the trash can! So how can you make your business plan readable and memorable for the best reasons?
Let’s see what the core of a business plan really is. A business plan is a methodology that defines and integrates the activities that are necessary for a business idea to become a company and provides expectations that demonstrate that it will be profitable. That is, it is the hook to get an investor and tell him that your idea is innovative and will be very profitable. Keep those two important words in mind: innovative and profitable. No investor will be interested in a company that will not be profitable enough to return your investment plus a very healthy profit. Now what might be an interesting word: innovative. For a company to be successful it must have something that is different from all other companies working in the same market. After all, if your company is going to be the same as all the others, they will hardly budge and let you take their customers. No, your company must have something different that keeps these customers away from what they buy all the time. So innovative in some way, be it products, business model or service.
Let’s add another word that you need to demonstrate within your business plan: feasible. Your investor or lender wants to see that your business is viable. If you do a Google search on the “Internet bubble” of around 1995, you will see that thousands of investors invested and delayed Internet startups that promised to make them millions of dollars in easy profits. The memories are long and investors are now hoping to see that the startups will be viable in the visible future so that they continue to receive an income stream and have a good chance of recouping their loan or investment.
Your business plan should be a communication tool that sells an original idea that serves to attract and convince people that you have the ability to implement the plan by establishing and managing the business.
At the beginning we highlight other reasons for business planning. In addition to fundraising, your business plan is also the best tool for evaluating the viability of your business.
So that’s the NUTS of a business plan, let’s take a look at the BOLTS that hold it together:
Professional: Internally it should be well structured with an index, page numbers, headings and bulleted paragraphs explaining complex issues. Lots of graphics break the boredom of too many words. Externally, it should be expertly bound and have a colorful and attractive cover. It stands to reason that full company details and contact information are on the cover as well.
Tempting. Written in a way that encourages the reader to evaluate the possibilities of entering the business. Take care of the writing style, be concise but not short and certainly not so verbose that fatigue draws attention. Get to the point, extract extraneous information that doesn’t support your business planning or business model. Avoid jargon, and if you must use initials, make sure the first example is spelled completely with the initials in parentheses below.
Dynamic. You have to be creative, but in some moderation. It is best if you tell a story but not one that is in the fiction section of a library. If your proposed business doesn’t invite big blooms, save them. It can be counterproductive to distract the reader. Creativity is important as long as it highlights something about the business and is there to hold the reader’s attention. Creativity should only be used to paint a picture of how the company will operate in the future.
Precise. Clarity is critical, but so is accuracy and truthfulness about the current state of your business and your future goals. The reader offers a bit of license, but they expect you to be honest about your numbers, customer numbers, and production status of your products.
Tidy. Guide your reader through your business plan and place supporting documentation in the report’s appendix. While key information should be in the main sections of the report, secondary data, market research results, professional résumés, and any letters of recommendation or favorable reports can be included in the annexes.
The last big SCREW that will hold your business plan together is CARE. Your business plan isn’t just something you have to rush to get your financing. It is the description of how your business looks now and how you want it to look in the future. Most business plans start with about 20 pages for a small business setting up in the world to a maximum of 50 pages for a business seeking significant funding. Whatever the size of your business plan, and you practice writing complex ideas succinctly, it should be written with care; after all, a good business plan is a roadmap to business success!