If you're starting a company, coming up with a solid business plan is obviously going to be high on your list of priorities. But a plan doesn't need to be a long winded PowerPoint presentation, and, in fact, it really shouldn't be. If your business plan is going to be a hit with investors, then there are 5 core elements that you really need to focus on.
The Executive Summary
This is the section that can make or break your plan: it's the part that everyone flips to, the first part they read, and the point where they throw your plan into the nearest rubbish bin if they don't like what they're reading. Keep it brief. Imagine you're on a lift with your investors; you've got one minute to describe your business and convince them that they want in. That's what your executive summary is all about. Everyone knows you are going to use a recruitment agency like Randstad or CareerBuilder; you do not need to go into detail here.
The description is like a follow up to your executive summary. You've got them interested; they're willing to press the “door close” button on that lift, but only for another couple of minutes. The description isn't a time for wowing, it's a time to honestly state what your mission is (or your product) and what you aim to do to achieve that mission. If the summary is all about showmanship, the description should be letting the idea speak for itself.
The Target Market
Okay, so your investors are pretty interested, now is where you show that you really know your stuff. The target market section should basically be all the research that you've done. Who will buy this, why you picked this group, the growth potential of that group, what typical profits in that group may look like, and all the results of your customer interviews?
This section is you telling your investors that you know how to get people to buy your product or service. It's your market share plan, how you're going to grab those customers. And yet, you need to be realistic here. You're looking at how consumers choose between competing products and how your business is going to affect this equation. Be warned that no matter how great your plan is up to this point, this section is where you could very well lose your investors. A great idea without a great method isn't going to convince anyone.
Okay, so there are a few more sections. Traditionally you introduce the management team and explain why they're the best people for their jobs. You'll also want a cash forecast, how much investment you need, how much profit you expect to make. Investors take these cash forecasts with a grain of salt, they're not looking for accuracy per se, but more that you've put the work in and really thought things out. The chances of you fulfilling a cash-forecast are fairly slim.
A successful business plan should be as brief as it can be whilst containing all the information it needs to contain. Leave the long winded PowerPoint presentations for your shareholder meetings. With your start up business plan you're looking to convince investors, not send them to sleep.
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