Constructing a Business Plan That Will Sell
If you want to start your own business you are going to have to put a lot of work into the planning phase. Good businesses are not built in a day. They are built over months, even years of research, diving into the market, looking into other solutions for your problem solving, and figuring out the viability of your idea as a whole. What this is, in one document, is a business plan.
Putting together a well-written and thought out business plan is vital to your future endeavor as a successful business owner. Your business plan is a blueprint of what kind of business you want to construct. Without one, you may easily get lost in the numerous details of owning and operating your own business. Unless you are financially affluent, you will have to enlist the help of investors to support your business venture. In order to attract these investors, there are a few key elements that must be included to help your plan become a reality.
Make Your Relevance Clear
A business plan is not only meant to map out your ideas, but it is also used to sell your idea to investors. When your business is new, investors are going to have a lot of sway in what you do, how you do, and if you’re going to move forward. This is because they are going to be your primary source of income. Most businesses do not recoup their losses in the first year. Some businesses can take even longer to start generating profit and being self-sufficient. This means that you need to impress investors from jump.
Therefore, it is important to do your research. Knowing exactly why your business is relevant to the community is a must. This means conducting market research and studying current trends. You can use the internet, word of mouth, and the local government records room to help you in your quest. There are a number of helpful resources at your disposal to achieve this.
You can also collect data through interviews, surveys, questionnaires and focus groups. Government sources can offer useful data and statistics on your customers and your competitors, according to the U.S. Small Business Administration. Reach out to your intended consumer demographic and personally find out what their needs and wants are and how your business can meet those needs and wants. Handing over a business plan without doing your research and knowing your target audience is a sure-fire way to scare away investors. Show your investors that you mean business by being prepared and showing them your business is relevant to the area’s needs.
You may have a great idea and a fantastic product, but those things don’t automatically mean success. There may be a good reason that no one has put your solution on the market yet. Maybe your idea is too expensive to produce and make a profit on, maybe it’s got failures that you didn’t foresee. That is why including financial projections in your business plan is essential. These projections can show your investors that your business can be a success. Your financial projections should examine forecast income statements, balance sheets, cash flow statements and capital expenditure budgets.
Forecast income statements are based on historical data and are used to create a budget and identify the financial needs of your business. A balance sheet is used to show your business’s assets, liabilities and equity. This information is taken from a specific time period and then evaluated. Your business plan also needs to take a deep look into its cash flow budget. This is a fundamental piece of information for any business. It shows where your money will come in and where it will go out.
Not only do investors often want to see a steady financial plan, but examining the cash flow gives you an idea of what to expect financially. Lastly, you will need to include a capital expenditure budget. The capital budget is used to determine investments over a long-term period, according to Finance Maps of World. Adding these elements into your financial projections is a necessary step to a profitable business plan.
Why Is It Important?
You have spent a lot of time agonizing over all of the minute details from market research to financial planning and everything in between. You have shown the investors that you are prepared and dedicated. Now, you need to explain why you are excited to launch your enterprise. If you aren’t invested and excited about your business opportunity, why should an investor be excited? Be prepared to share why this is important to you and what you expect from your business. This may include your vision for your business, your personal background, and the goals you want to achieve through this venture.