Business Plan Blueprint

What should your winning business plan include?

Investors receive thousands of business plans every year, and the ultimate destination for many of them is the wastebasket. Some will end up there within seconds, and the others will follow a few minutes later, their inadequacies becoming apparent all too quickly.

A business plan may be your only chance to make an impression on an investor, so it has to count. It should start with a well-defined problem that is supported by evidence such as market research. If you can convince the reader that there is a predicament, they will stay with the plan for a bit longer to see if you have come up with a solution.

You may decide to write the plan yourself or hire professional help, but even if you follow the latter route you should write out a rough plan—you need to get a grip on
the basics.

No two businesses will be the same, and therefore no two plans will be the same, but a typical business plan will include:

Executive summary—This is the most important part of the business plan and should be written last. Above all it must inform and excite the reader. The summary is the first thing the money people will read, and it must have punch, power, and passion. You are excited about your idea, and this is your chance to enthuse others and get them on board. As you might expect, it is a condensed version of the master plan and should answer the following questions:

• What sort of company are you?

• What is so special about the product/service?

• Who is on the management team?

• How much money do you need? And when do you want it? All at once, or in stages? What will you use it for?

Generate a buzz about the uniqueness of your idea. Stick to the facts and don’t exaggerate. Keep the summary concise, no more than two sides of letter-sized paper.

Company profile—This is your opportunity to impress and astound the reader with your company’s history and how you’ve grown from a kitchen table start-up to a prominent local employer who is ready to go national. Provide a history of sales and profits and other relevant numbers. Investors will be wary of any company that has had a smooth ride without any hiccups. Writing about how you faced and overcame initial challenges will boost your credibility. Outline the plans you have for the future.

Product or service—Describe it in jargon-free language. What does it do? How will it benefit people? What sets it apart from your competitors’ offerings? Put yourself in the mind of an investor and imagine all the possible questions that you could be asked about your idea. What would you want to know before parting with significant sums of cash? The answers should all be here.

Market analysis—This involves thorough research to demonstrate that you really do know what you’re talking about. This is a portrait of your competitive landscape. Who are your competitors and what are they offering? You must know everything about them—their strengths, weaknesses, and prices. How does your idea compare? Your product or service must go beyond theirs. This section will also include details about industry trends, your projected growth, and customer behavior.

Market strategy—This is your bold plan of how you will convince customers to buy from you rather than from the competition. Identify all the ways that you will get new business and the steps you will take to ensure that it happens.

Operations—Describe how the company will function, its physical setup, and who is responsible for what. Investors need to know that the business is going to be run efficiently.

Management team—Investors will want to feel confident about the brains of the operation. Write a summary of the management experience of every member of your senior team, even if you are the only one. Entrepreneurs with a successful track record will be looked upon more favorably by venture capitalists.

Financial plan—This is where the numbers go. You should include projections of how much money you think you will make over a three- to five-year period, and how funds will be used to grow the business.

Avoid common blunders

Don’t blow your big chance by shooting yourself in the foot. Think ahead to avoid any business plan mistakes.

Make your plan well ahead of time—If you wait until the last minute to write your plan, you will make life hard for yourself. Understand that you need a plan now, and set aside enough time to give it the thought, care, and attention that it needs. If you meet a potential investor who likes your idea, they will want to see the plan pronto. You will have no way of creating one overnight, complete with detailed financial projections.

Make your plan exciting—If they snooze you lose, so don’t send your audience to sleep with dull formatting. Jazz it up a little with colorful charts, bullet points, tables, and graphs—but avoid going overboard.

Be concise and brief—There is so much information to pack into your presentation, but you must be concise. Keep the plan to about 20–40 pages with clear, well-spaced, and easy-to-read text.

Focus on the team—You may be surprised, but an idea on its own does not make a great business. An investor will want to see a strong management team and a good company built around the product or service. An unoriginal idea executed by a superb set of managers has a better chance than a novel idea in the hands of a weak and poor performing company.

Be realistic—You are buoyed up by your idea, but don’t employ wildly optimistic projections. An overnight success may happen once in a blue moon, but no investor will believe you if your forecasts go through the roof.