If you’ve even considered launching your own start up, you’ll want to have a business plan. In short, a business plan lays out future objectives and strategies for achieving them.
This isn’t like a dream board where you just write down that your company will be a Fortune 500 company (if only it were that easy!). This is about getting down to the nitty-gritty and getting the facts, numbers, and research to support your goal. You probably aren’t going to knock out writing this thing in one night, so get comfy and flip the switch on your biz brain because we’ve got some tips on how to write a business plan that rocks.
Study up on your competition.
You should know them inside and out. Your competition research should include both direct and indirect competitors. Direct being companies that sell the same sort of item as you (e.g. Company A and Company B both sell socks). Indirect competitions sells a different item, but satisfies the same need (e.g. a bowling alley is an indirect competitor of a roller skating rink).
You’ll first want to do a SWOT (strengths, weaknesses, opportunities, and threats) analysis on your competitors. After you’ve got that squared away, compare it to your own SWOT analysis.
How do you measure up compared to their strengths? How will you be better in their areas of weakness? How do your opportunities compare to theirs? And how will you avoid the same threats they’ve come across? Really think this through, especially if your direct competition is struggling. You’ll want to show your audience that your venture isn’t headed down the same path.
Study up on your target audience.
Target market research can be hard. Your first step should be to complete an ideal audience profile so you can figure out exactly who you want to market to. Alternatively, you can dig into the demographics and psychographics of your direct competitor’s audience. This tactic works particularly well in cases where your competition is a pretty popular name.
An indie game developer looking to appeal to players of the Overwatch title would be able to find studies and communities on exactly who they’re looking for. You’ll want to know your audience’s age, education level, and average salary, as well as what they do in their free time, what they like to eat, where they like to visit. Not only will this information help investors see the reality of your venture being successful, but it will also allow potential brand partnerships to see where their product can benefit.
Have proof to back up your claims.
Why do you think you’ll turn a profit in the first year? How do you know you won’t meet the same threats as your competition? Why is your product the answer to a specific need? Your audience will have questions, and the more proof you have to back your claims, the better your chances of getting whatever you’re asking for. Whether you’re presenting your plan to potential investors, partners, or consumers, you need to confidently project that your business plan won’t lose anyone time or money.
Don’t overestimate your projections.
As nice as it is to say you’ll reach $1M in sales by year 2, it can be hard to back that up with facts. Taking your current sales and raising them by 10-20% is a little more conservative, but also makes your goals more realistic and attainable. If you truly believe you can hit a higher mark and have the research to back up your claim, start with the lower projection and then share the higher number while specifying what it will take to get from Projection A to Projection B, whether it’s more funding, more marketing, or a bigger team.
Build a strong team.
If you’re going the Solopreneur route, be prepared to answer questions on how you’ll compensate for your areas of weakness. It would also be a good idea to put together an advisory board of people skilled in your field.
If you are growing a team or already have one, make sure to take a look at everyone’s SWOT analysis to ensure you have a well-rounded balance. You’re not going to get very far if your team is all marketers and no accountants, for example. Don’t forget to look at everyone’s experience. It doesn’t have to be in a relevant field but it should show why that person is a good fit for the venture and why they’re qualified to hold whichever responsibilities they have.
Keep it concise.
Cut the fluff. Period.
People are busy these days and few want or have the time to read a 50-page business plan. Try to keep it under 20 pages and avoid repetition and anecdotes to leave more room for your facts, claims, and support. If it’s getting too text-heavy, break it up with a graph to display your projections. Investors and partners should be able to find all the information they need in your plan, and even though 20 pages sounds like a lot, you’ll be surprised at how quickly they fill up.
Make your plan stand out.
Business plans are pretty strict in what need to be included, but there are still ways you can make yours stand out from the rest. Try a more creative presentation, rather than just boring black text on a white page. You could also modify a template to reflect your brand, which may even help your case by demonstrating that you know what you’re doing when it comes to marketing your brand. Alternatively, try to think of what other companies haven’t tried yet (or maybe where they’ve missed the mark), and use that a differentiator. If it’s truly creative, it’ll stand out in the minds of investors and partners as to why it’s a good idea.
Do you have other tips or tricks to share about writing business plans? Share them with us below!