You are ready to go and get funding for your startup idea. But the obstacle of writing a detailed business plan is slowing down your progress. Don’t be the entrepreneur who forges ahead without a plan to their startup companies eventual demise.
The value of a business plan is not solely for your financing loans and investor pitch. The plan’s vital role in your companies success is the thought process you, the entrepreneur, go through as you compile the information and financial numbers. Here is where you set your goals, “crunch” your numbers to determine if your business idea is profitable. Your research will uncover information that will help you modify your marketing plans to your benefit.
Our experts advise you to be sure to make your document is complete and not to forget these ten critical components of a winning business plan.
10 Most Forgotten Items in Business Plans
This critical and most read section of your plan needs to be at the very front of your document. However, it should be the very last part that you write. It is to contain and summarize all the information in your complete business plan. Your readers should be able to quickly scan this summary and get a general understanding of your goals and why you will succeed. It should be no longer than one page, and preferably shorter. Answer these questions for a powerful and compelling executive summary:
- Why your customers will care about your business?
- What pain points you solve for these customers?
- What sets your company apart in the industry?
- Why your startup will succeed?
It is surprising this is one of the most often missing components in submitted business plans. However, it is probably the most important. You cannot succeed by not considering, and strategically planning how to best your competition. Your prospective customers will certainly consider all their buying options before making a purchase.
- Who are the companies that are in the marketplace now?
- How do they sell their products?
- Why is your product needed and wanted in the industry?
- What is your value factor that makes you different?
Originality and Innovation
Be sure to include the reasons why your company is unique. What is your point of difference? Today‘s highly competitive business environment demands that companies continually innovate to succeed. Decide how your firm will encourage creativity and improvement in all departments on an ongoing basis.
Cash Flow Analysis
The common mistake that beginning entrepreneurs make is being overly focused on profits and neglecting cash flow. Many businesses fail, while still technically profitable, by running out of money. Understanding, planning and managing cash flow is critical. Include a detailed cash flow analysis report in your completed business plan.
Your goal should be simple and crystal-clear, and most importantly measurable. Instead of saying “I want the best salon in town,” which is not a measurable goal; instead phrase your goal like this, “My hair salon is the best in town with 200 regular customers in 2017”. Once you convert your goal into a measurable target, you are more likely to hold yourself accountable and will be able to measure your progress against this specific number.
Plans are not reality. Be prepared for everything to go wrong. Remember Murphy’s Law. Detailing these plans will impress lenders and give you peace of mind to know what to do in the case of emergency.
- How will your company survive disasters – both natural and marketplace?
- How will you cope with a hurricane or flood?
- What will you do it you do not achieve your sales goals?
- What if your expenses and cost of goods are higher than expected?
- What if you run into vendor delivery issues?
Fast company growth is stressful for the entrepreneur and the startup firm. Again, this type of “what if,” long-range thinking will give both you and your investor’s confidence in your ability to manage a fast-growing company.
- What are your plans if you get more orders than anticipated?
- What if your website traffic increases 10X?
- How will you increase production, fund growing capital needs and hire more staff?
Most business plans include information about the target customer, their demographics, such as age, gender, income, and geographic location. Smart companies also write about their customer’s mindset and their emotional needs and problems that their proposed business product will solve.
Social Media Plan
Social media is a major part of all business promotion and needs to be addressed properly. A strategic and well planned social media program of how to build audiences and engage with customers is crucial to business success. The time to develop this plan is at startup.
Having a well-researched exit plan will help you get venture capital investment. VC’s want to know how they can cash out of your startup. Most venture capitalists want to see a growth of 10X of the initial investment. These profits are most often realized when companies are sold or go public.
Do not depend on your computer spellcheck function to b. E sure that your document is free of typos. Instead, take the time to print your plan and read it very carefully backward. This assures that you will be more likely to find any mistakes in spelling, word usage or incorrect data. It can also be helpful to have a friend or business associate. Proofread your business plan. Also, do not forget to double check all your charts and graphs for typos and mistakes. The smallest typo can create a negative impression on your lender’s mind about the professionalism of you and your startup idea.
Sadly many a good business plan has been rejected due to grammatical errors that result in misunderstandings and negative impressions. Don’t let this happen to you, instead hire a professional proofreader to check your work. You will be confident knowing that your business plan is letter perfect.
Go out and pitch your business idea and get funded! Good luck.