Before starting to write a powerful business plan aiming to persuade other people – think partners, investors, banks or other potential stakeholders – remember that the first reason why you’re writing this document is to convince yourself, the founder.
Entrepreneurs are usually over-optimistic and often overstate the chances of their venture success. The role of a business plan is to formalize their “winning business idea” into a realistic and practical action plan. When done properly, a business plan can in fact reveal the actual chances of success (or failure) of the opportunity, and thus potentially change the entrepreneur’s perspective regarding his or her business idea…for the better.
If an initial business plan fails to convince you, the entrepreneur, then it is time to refine the business model or simply move to the next opportunity. If the business plan confirms the validy of the entrepreneur’s business idea, then great, it’s time to move forward and act.
If you want to launch a successful business, then writing a compelling and powerful business plan is extremely important.
However, if you’re a new entrepreneur or just don’t have the time or required knowledge, it can be overwhelming to write such a demanding document yourself. This is why we have already done the job for you by offering you a large collection of ready-made business plans with automatic financials by industry. You only need to spend a few hours customizing your template to make it 100% fit your own project.
In all cases, there are some things to keep in mind with regards to creating a stellar business plan. With the right ideas and guidelines, you will have no problem establishing a convincing, robust and easy to read business plan. It all comes down to understanding the structure and how you should write such a document.
What are the Key Components of a Powerful Business Plan?
A powerful business plan will always have six crucial components. All of them are important because they will provide readers with crucial information and offer enough content allowing investors to make an educated business decision too. To invest or not to invest? That is the question. So here are the main sections every business plan must have:
- The first section should be the Executive Summary. This is where you provide an overview of your company and concisely discuss your general plan. This needs to be at the forefront of your document and it should be simple, not too long. Some people choose to write this section at the end, others at the beginning, but it’s a critical component of the business plan because it summarizes the opportunity in a simple and easy to understand format.
- Following the Executive Summary, you should discuss how your business idea is solving a specific problem or need. After citing the main problems currently experienced by your potential customers, you need to demonstrate how your products or services can provide effective and lasting solutions to these specific needs.
- The third important section of a business plan is the market analysis. This is where you discuss important market factors that affect your business including industry trends, your target audience, key market stats, economic outlook, regulatory outlook and competitive landscape. The market analysis section is very important because it provides a fact based overview of the context surrounding your business.
- Your implementation plan comes next. This sextion is where you show how you are taking the opportunity and transforming it into a tangible business. It’s also where you will cover the sales and marketing plan, success metrics, key milestones and detail your hiring and operation plan.
- It’s important to have a section about the founder and key people behind your business. This section presents info about your team and key management positions. Since we are talking about the management summary, this is where you want to talk about the company history if applicable, location and its legal structure.
- The next section is the financial plan. This is where you can discuss things like the income statement forecast, the cash flow forecast, the balance sheet forecast, and any other relevant financial data and metric. This section is extremely important especially if you plan to use the business plan to convince investors to inject money in your venture. The financial plan demonstrates the economic viability of your business and answers important questions such as: Will this business make money? How much cash does it require to take off? What is the expected return on investment for investors? What is the expected net profit margin after three years of operation? What annual fixed costs are we looking at? Make sure you spend time and effort in building a solid and convincing financial plan. Beware showing very optimistic numbers and forecasts. Investors will take you more seriously if you are conservative rather than aggressive with your assumptions. One solution is to show multiple financial scenarios starting from a conservative base scenario to an aggressive optimisitic scenario.
- Lastly, you have the appendix. This is not mandatory for a business plan. You can use it as a section providing additional information about your business, product images or mockups…etc.
In addition to the above, there are other elements to consider adding to your business plan. You can have a section about capital raise or use of funds. However, it is usually advised to add these towards the end as they can act as a call to action or a bridge to the next steps. Once you have finished discussing your innovative solutions and features, your readers or listeners are now ready to move to the next step and find out about your requirements. They are now ready to make an educated decision based on your compelling business case. Asking for money is not always easy and we’ve found that the best way to do so is to first entice your audience by taking them on an exciting journey showcasing how awesome your business idea is before asking them for their help to make this dream a tangible reality.
So remember, show them vividly the big opportunity first, make your case convincing by backing it with science and numbers, then lastly ask for the ticket price allowing them to be part of your great adventure.
Tips For Writing a Powerful and Compelling Business plan
It is key to understand your target audience, readers or listeners. Potential stakeholders might read your plan, others might listen to you explaining it. If you are presenting your business plan to an investor who notices you have a powerful connection with your audience and you are able to answer the raised questions properly, then that might persuade him to invest in your business. The key message here is that the way you present and defend your business plan is as important as the document itself.
Thus, we recommend you to maintain a confident and consistent body language and tone of voice throughout your presentation. These things will help a lot because form and perception matter too. Couple this with a robust substance, and you have a winning business case.
Another important thing to keep in mind is the act of doing a proper market analysis. Many business plans fail because they are not backed up by facts and figures which makes the case presented by the entrepreneur weak and unconvincing. Don’t be an amateur. Aim for greatness and this starts by being and acting professional. A business plan without a minimum of relevant market research won’t take you anywhere so focus on this part and put as much effort as needed.
A thorough competitive analysis is also a very important element to include in your business plan. Some entrepreneurs avoid talking about their competitors for various reasons. This is a big mistake. A competitive analysis allows you to shed light on how your competitors are not doing well in certain areas and how you can benefit from this. This is your opportunity to explain how you can do better for the benefit of your customers. By highlighting your competitive advantages, you will be able to show how you plan to differentiate yourself from the current market offering and this is often a key point that will make or break your business case. So don’t be too concerned about mentioning the competition, on the contrary, it is quite helpful if you study your competitors because there’s a lot to learn from them. And even better, you can assess what they’re doing and improve on their ideas!
Now a common question that often arises is the following: Can I use a template to build my business plan? Or in other words, is there a pre-made prototype document where I can edit text sections and numbers and end up with an actual business plan?
The answer is yes. Ready-made business plan templates are quite useful when it comes to understanding in detail what goes into each section and can help you build a compelling and robust document that you can share with investors if properly used.
But since each startup or new venture is a specific case, it is the duty of the entrepreneur to weave a unique story for their business idea using the template as a basis. So the best way to use a ready-made business plan template is to tailor it to your own project and make it unique.
To summarize, a template should be seen as an user-friendly aid to build your business plan by laying out the initial structure and outline, and defining the key messages you wish to develop in each section. But then you need to go the extra mile by developing a full-fledged, bespoke document by developing each section and customizing the various components in an attractive, personal manner.
So try to think of your business plan as a compelling story that you use to convince yourself and other stakeholders to start the new adventure of launching a venture. Of course, this story uses logic and numbers to build the case – but make no mistake – your business plan has to be a “personalized” and even an “intimate” document. When readers go though it, they need to immediately recognize your visionary character behind the text and charts.
Let’s talk now about the length of your business plan. The good news is that you don’t need to come up with a 100 pages dissertation. On the contrary, the shorter your document, the better. Having created and gone through literally thousands of business plans, we recommend you stick to something between 25 to 40 pages max. Investors like most people don’t like to go thorough very long documents (unless there is a valid reason for this). Make it to the point, keep it short and interesting to read!
A final tip to discuss before we wrap up. Remember that all stakeholders, whether partners, investors, suppliers or customers, relate to people, not companies or brands, especially in the early stages. Sounds a bit counter-intuitive? Well think about the most successful companies over the past twenty years. You cannot think about Apple without picturing Steve Jobs or think about Facebook without picturing Mark Zuckerberg.
The point is that investors and other stakeholders always assess the key people behind ventures before deciding to invest in them. If they decide to invest in your project, know that they have made a decision to invest in you! This is why it is key to write a powerful About Us section detailing the profile and strength of the founding team in any professional business plan.
One final thing to note about writing a business plan is that you always need to focus on the requirements of your industry and aim to tailor your story. It is crucial to create a professional and unique document that tells the story of your business opportunity.
It’s also very important to personalize your business plan by sharing your vision and explaining how you plan to elegantly solve the problems currently experienced by your prospects. The more you show that you care about your potential customers, (i.e. the more your business plan offers value) the easier it will be to entice investors and other stakeholders to join your exciting adventure and back you up.
Make it insightful, personalized and share details about your vision. Only a powerful and visionary business plan will be able to convince others. But before you convince others, remember that you need to convince yourself first. Hence, make sure to create a business plan that makes YOU proud.