Do These 4 Things First Before Writing a Business Plan

A great business idea will only be considered great if it’s done well. Some people have the illusion that starting a business is easy and all you need to have is capital. However, that is not the case because a lot of people and businesses require a huge capital and for you to get that, you need investors.

A business plan is a guide where you lay out the vision, goals, and objectives of your business idea. It also indicates the strategies that will help you achieve those objectives. Another vital part of any business plan is the financial projects. This part will show your investors the projections you have for your business and when you will be able to break even. It is important that you show that your business will profit after 2-3 years.

That being said, how can you make a best business plan that is investor-ready? Here are 5 things you can do to get great results.

  1. Fool-proof your idea

You already know that a good idea will only remain an idea unless you know it so well you have equipped it to withstand changes in the market. To be able to prepare your idea, you should know these few things.

  • What am I really selling? Is it a product? A service? A technology?
  • What is its industry?
  • What are my costs?
  1. Know the market

Now that you’ve made sure of what industry your product is in, it’s time to survey the competitive landscape. In doing this, you would have a glimpse of your competitors and what their competitive advantages are. You will also get to know the industry’s best practices and this will greatly help you when it comes to executing your business. You can get information regarding these things from databases and credible surveying firms that gather data on the industry leaders and their sales and profits.

  1. Research on the parts of the business plan

The next thing you have to do is to know the parts of a business plan – from the executive summary to the financials. Each part has its own objectives and you should be able to meet these objectives so that your business plan will be cohesive and comprehensive. There are several online consulting sites where you can ask help in building your business plan. Tip: don’t fall into the trap of using colorful language. Business plans are supposed to be direct and clear to avoid confusion and more mistakes when your investors ask you.

  1. Be number-savvy

When it comes to your business’ financials, you have to know how to compute thousands and millions of numbers. Familiarize yourself with the things investors look at (breakeven point, ROI, operations expense, etc.). This will help you paint a picture of how your company will earn and gain profit. To add to that, your financials should show your revenue streams. Where will you be getting the money? Is it solely from sales? The next thing you have to know is the expenses included in the business and how will they be minimized in the long run?