A business plan is a written document that describes a business. It includes all the objectives, strategies, sales, marketing and financial projections. A business plan is mostly needed by entrepreneurs and established companies that need help to manage a growing business.
A business plan helps an entrepreneur to clarify their business idea, set out goals, identify potential problems and measure the performance of a business. A great business plan should be clear, have a good structure, and direction. Here are tips to help in crafting and writing a good business plan.
Be realistic with time and resources available
In order to write a great business plan, one should avoid being overly optimistic with time and resources. Entrepreneurs tend to think that operations will be faster in a bigger company than a small firm since there is job specialization. This is not the case. Being realistic with the time and resources will help the plan to be more credible.
Understand your audience
An audience may include potential investors, companies interested in a joint venture and bankers. The writer should therefore ensure that he understands the purpose of the plan to make it easy to communicate to the audience. The plan should be written from the audience perspective as different audience will have different requirements. For example, if the audience is a potential investor, one should write clear explanations on the returns on investment and time frames for getting their money back.
Do thorough market research
Knowledge of the market is an important aspect of writing a business plan. Market research will help one to understand the market size, expected growth, the target group, and the competition in the market.
Pay attention to details
The plan should not be too long but should have enough details for the audience to get sufficient information needed to make well-informed decisions. The business plan should also have proper grammar, reliable projections and accurate content.
Include all the essential parts
A great business plan should have three sections, the market analysis, the marketing or action plan section and the financial projections. All these sections should be detailed and given a good coverage.
Understand the competition
For one to understand the business environment, they have to understand the nature of competition in the industry. The writer should understand the pricing policies, know competitors, and understand the quality of the services and products. This will help in strategizing how to differentiate the business and focus on the consumers.
Be specific with your action plan
One should spell out the operations, the management and people who will do it, how much it will cost, and how to get customers. It is also important to specify the steps the management will take to achieve the projected goals.
List all your assumptions
A business plan has many assumptions, and it is important to understand them, list them and then revisit them. Assumptions can be those made in the head, those backed up by research and past experiences and the validated hypotheses.