Despite it being a well-worn cliché about if you fail to plan, you plan to fail, the reason it gets repeated so often by business gurus and advisors, is that it so often turns out to be true.
Building a business takes planning and a series of short and long-term strategies and goals. If you want an example of how Applioque gained traction for example and see the benefits of following a meticulous business plan, a company like Ashton Burkinshaw has it covered.
If you have a business dream that you want to turn into a reality, here are some of the strategies that should allow you to create an effective business plan.
Getting financial backing
The vast majority of businesses start out with a modest amount of capital from the owner and many seek to obtain some start-up funding, so that they can do everything they need to get the venture operational.
Fundraising for a new business has always been a bit of a minefield and at least the options are more varied these days, with more alternatives available than just approaching your local bank manager with your idea.
Regardless of whether you are seeking funding from a bank, crowdfunding or a private investor, they will all want to see your plans for how the business is going to generate a profit and just as importantly, how you are going to be able to pay them back the money you borrow.
This is the fundamental aspect of a business plan. It allows you to see whether your business idea is financially viable and will provide some cashflow projections so that you can see exactly how much money you need to survive those early days as well as demonstrating how you are going to repay your investors.
Your business plan is critical
Even if you have an innovative product to demonstrate to potential investors, anyone with money to invest in a business venture will want to have confidence in you as well as your business, and being able to produce a viable business plan helps you to tick both those important boxes.
Fundraising is not a quick process and the average time taken to secure funding is very often somewhere between three and nine months, so be prepared for plenty of questions about your plans and don’t be dissuaded by rejections, if you are confident that your business plan is robust enough to withstand scrutiny and demonstrates viability.
An investor is looking for a business plan to give them the information they need to determine when they are likely to get their capital returned and what return they can expect. Any business plan that lacks depth or accuracy is going to have the effect of almost instantly turning off an investor and reducing their confidence in your business proposal, so it is critical that you get it right before you start offering it around to potential investors.
There are a number of key components to a business plan and they all need to come together successfully if you are going to produce a document that encourages people to believe in you and your business idea.
Consider the audience you are pitching to with your business plan and tailor it accordingly. This means that if you are pitching to an investor, you want to demonstrate how you will provide a good return on their investment, if you are pitching to a bank or other lending source, the emphasis should be more on showing them how you will be able to repay the loan.
Many investors want to be reassured that you have good market knowledge and have done your research. Include statistics and a written summary of your awareness of the opportunities and threats that exist.
All businesses face competition in their chosen marketplace, so make sure you address who and what competition you face and provide details of your strategy for dealing with these competitive threats.
Financial information in your business plan will often come under intense scrutiny, so you need to really focus on getting your figures right and provide detailed cashflow and sales projections which can be proven for accuracy.
It is not unusual for some of us to struggle with financial figures, so it is always worth spending some money on getting some assistance from an accountant or trusted advisor, rather than make a fudge of the figures, which will often be spotted and could scupper your chances of getting the funding you need.
If you stick to a proven strategy for building your business plan using all of the key components, you will increase your chances of turning your business dreams into a reality.