10 do’s and don’ts of writing a business plan
10 do’s and don’ts of writing a business plan
For the best outcomes, you should strictly adhere to a set of principles when writing a business plan. When it comes to developing a business plan, there is one golden guideline that stands out above all others: your business plan must address each of your potential backer’s primary issues.
If you fail to succeed on this first point, all of the other things you should and shouldn’t do will seem insignificant, and even a fantastic business idea may not receive the support it need. To improve your chances of success, observe these 10 Dos and Don’ts:
- DO show that you understand market demand
An effective business plan requires a thorough understanding of your microeconomic environment, so be sure to demonstrate that you’ve thoroughly analyzed the factors that drive demand up or down in your market. The majority of the time, entrepreneurs come up with a business idea because they see a need in the market.
As a result, consider what “gap” your product or service can cover, as well as the recommended remedy. Do your part and learn about the microeconomic situation so you can put together a cohesive piece. Your clients will think you went above and above to collaborate with them if you impress them with your breadth of expertise.
- DO use sensible numbers
You may have estimated that your revenue will reach £4,672,591 in three years, but for funders, such a precise forecast is a red flag that the writer lacks strategic thinking.
A more seasoned strategist might project revenues of £4.7 million, knowing that predicting anything higher than those three years out would be ridiculous. Financial forecasts should be simple to understand so that investors can quickly evaluate if the company will profit. There’s no need for pages of spreadsheets displaying complicated figures. A few graphs and charts can swiftly communicate the most important information.
- DO stick to a clear storyline
Sit down and create a single statement that outlines why your business idea should be supported. Don’t get sidetracked from this important message; your business plan should only support this statement and remind the reader why your company is worth investing in.
The importance of first impressions cannot be overstated. While this may appear to be a cliche, it cannot be overstated. You’ll need to seize and hold your client’s attention at all times. Provide a rationale why potential clients or investors should look at your business plan in the first place in one sentence. Then, based on that rationale, write a clear and simple storyline that includes crucial facts and details about your company. You don’t want it to be too long, because you’ll lose interest right away. Trim it at least twice more to get it as pure as possible.
You could produce a 200-page business plan that goes into great depth, but if you wander from the main story, your investors will lose interest, so keep it to a lean argument with a few supporting appendices if necessary.
- DO make it clear why your business is special
Now that you’ve painted a clear image of the market, it’s time to demonstrate how your company fits within it. Make sure your company strategy answers the following questions:
- What is the long-term competitive advantage that distinguishes it from the competition?
- What sets your idea apart from the others?
- Why does this imply that you may provide enticing returns to your backers?
- Do tackle the risks head-on
Risk is invariably a backer’s top concern, so don’t be afraid to address it head on. Demonstrate to your backer that you understand the risks – to market demand, competitiveness, strategic positioning, and resource deployment – and how you plan to mitigate or insure against them, as appropriate.
Risks are balanced by opportunities, therefore emphasize that while this risk may occur, the counter-balancing opportunity is just as likely, if not more likely, to occur. Set out the risk-to-reward ratio in easy-to-understand graphics so that the supporter may weigh in on the investment decision, which will almost certainly be in your favor.
Read Also: ELEMENTS OF A BUSINESS PLAN
10 do’s and don’ts of writing a business plan
- Don’t ignore the fact that your competitors will respond
Markets change all the time, so think about what your competitors would do if you followed the approach outlined in your company plan. Is it possible that your competitors’ response may jeopardize your ability to meet your goals? Be truthful, and demonstrate to your funder that you have thoroughly considered the implications.
- Don’t forget who you are writing for
Every paragraph of your business plan should be written with your target audience in mind, which could be your board of directors, a lender, or an investor. Determine what concerns your potential backer is most likely to have and address them directly.
Instead of focusing on what you want to write, consider about what your backer needs to read. You may be pleased of what you’ve accomplished so far in your firm, and you may have huge plans for the future, but if that information isn’t important to your backer’s decision, it should be left out.
- Don’t underestimate the resources you will need
You may be working out of your loft or garage right now, but if you have big ideas, you’ll need help eventually, which means you’ll need resources. Set out exactly what resources and partnerships, such as employees, managers, premises and equipment, suppliers, advisers, agents, and distributors. You’ll need to meet the forecasted growth rates.
- DON’T dismiss the competition
It’s all too easy to fall into the trap of not giving the competition enough credit when developing a business strategy. Regardless matter how fantastic your idea is, your backer will understand that customers will always be tempted by other options, so don’t be afraid to acknowledge that. Examine what your competitors excel at, where they fall short, and what they are likely to do in the future that could alter competition levels.
- DON’T think your backer was born yesterday
Investors who are serious about investing in your company will conduct their own due research and speak with customers, employees, and maybe competitors. Any unpleasant news will inevitably surface as a result of this, so don’t try to hide it. If they find out anything you should have informed them, any trust you’ve developed with them will be shattered, and they’ll walk away.
The same can be said of forecasting. Please resist the need to lie or exaggerate, otherwise you risk losing your supporter entirely. Sure, you should be positive, but you also need to be realistic, or your backer will see right through you.
If you need a service of a Professional Business plan writer, then Dayo Adetiloye Business Hub is the place to go Call or WhatsApp us now on 081 0563 6015, 080 7635 9735 or send an email to dayohub@gmail.com and we will solve any of your business plan problems.
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