A business plan is integral to company growth. A 2020 survey found that nearly 7 in every 10 business owners recommend creating a business plan before launching a new business. Additionally, businesses with a plan grow 30 percent faster and are 2x more likely to secure investor funding than those without. That clearly shows business planning is a crucial step every startup entrepreneur needs to take to ensure the success of their ventures.
With these statistics in mind, it’s important to take a step back and put in the time and effort to map out the details of your company in a business plan and use it as a foundation. With that in mind, here are five tips for creating a standout plan for your business.
Narrow Down What Makes Your Business Unique
A business plan serves as a roadmap for your company’s growth and development and tells potential investors about who you are and what they can expect from your business. As such, it’s important that you take the time to think and reflect on what your startup company stands for and what makes it stand out from other brands already in the market and industry.
If you can’t explain in simple terms why you’re spending your valuable time and resources trying to launch a new business, it will be difficult to convince investors to lend you much-needed capital. You need to understand your value proposition and brand’s positioning in the market before diving into the nitty-gritty of your research. So, make sure you start by crafting an elevator pitch that gives an overview of your business, explaining why people should be interested in your startup company.
Keep Your Business Plan Short and Concise
Whether you’re creating a business plan to raise capital for your startup, to seek out potential partnerships, or just to create a roadmap for your company, your business plan should be simple and concise. Get rid of all the fluff and filler words and consider working with a business plan writer or consultant to help you hone your messaging. Lastly, you can utilize business plan software to guide you throughout the business plan writing process.
Your business plan shouldn’t be longer than 15 to 20 pages. You want to get to the point as quickly as possible since investors don’t have the time to read through long documents. Create an appendix section where you can include additional information and data that may be useful and valuable to potential investors or your audience, which might include certifications, copyrights, trademarks, leases, and other important documentation.
Segment Your Potential Market
No matter who you’re creating a business plan for, your target market can make or break your business. It’s not uncommon for founders to choose the right market but fail to validate their estimated potential market size using verifiable data points. Some choose the right market but don’t take the time to understand their ideal customer profile, while others choose the wrong market from the onset. And it’s no surprise that they find themselves struggling to break even in the market.
To create a business plan that stands out, you need to identify your market as a whole, break it down into bite-sized chunks, and demonstrate what market segment your brand can realistically hope to dominate within a specific period of time.
You should make educated decisions about your addressable market using relevant independent data. Plus, it’s important that you research relevant trends and projections in your industry so you can get an idea of your target market segment. Incorporate this information in your go-to-market strategy and share it in your plan.
Show You’re Conservative in Your Projections
You may be tempted to inflate your projections but investors are interested in realistic projections and will quickly turn the other way if your numbers cannot be easily justified. Investors are more interested in knowing how you came up with your financial projections and cost assumptions, as this is what helps them determine whether or not you really understand your business. As such, your focus shouldn’t be just on the figures or numbers. The story and narrative you tell is what matters. Plus, you should be realistic in your approach and conservative in your projections and estimates.
Provide Competitor Analysis, Not Just a List or Data
You’ve probably come across business plans where the business owner only provides a list of the companies that they consider competitors. Some may go an extra mile and do a data dump with nothing to show they understand or are at least concerned about other businesses that currently sell products or offer services in the market they’re looking to enter.
No investor will give an audience to an entrepreneur who doesn’t show they understand their competitive landscape and have identified gaps in the market that their solution can fill. So, make sure your business plan not only identifies your competitors but also highlights their orientation in the market and explains how your company intends to differentiate itself from the competition.