Penning a Winning Business Plan
A business plan is the first step you take after you have done everything to build a company. Now that you have an idea or a product to sell, you go out there with the business plan in your hand. The business plan introduces you to the world of investors or venture capitalists. Depending on the quality of the business plan and its presentation, the fate of your company is decided. If you have made a real effort to develop a very good business plan that is easy to read and understand, then you have nothing to worry about especially if you are selling something that has a market out there. But if the business plan is confusing or not put together efficiently, then your company doesn't have a chance. Remember a venture capitalist is not going to walk into your company, look around and just hand you the money. These guys go through thousands of business plans a year. Your business plan has to be very professional and profitable looking for someone to even go beyond the cover page. Try to be versatile and talk about all the products your company will be concentrating on instead of just one or two.
- Following the cover page, which should be as professional as possible, there should be an executive summary. Remember to have some sort of a confidentiality agreement on the cover page that will restrict the reader from divulging the contents of the business plan to someone else. Executive summaries should be the last thing you write with the business plan in front of you. It basically summarizes the whole plan with emphasis on the marketability of the product and growth of the company and it's goals.
- Write a brief history of the company and don't forget to include your goals.
- Identify the management and if any of them have excellent track records in the business field, include them with their resumes.
- Identify the product and what it will bring to the market as well as what the future holds for this product or products and if you plan to spin this off into other products. Investors like to see as far into the future as they can or at least want to know that you have plans for the company beyond the three or five years that you have included the business plan.
- Show the company or product's market. Make sure you have a large and receptive market to write about in the business plan. Without one, investors won't spend their money.
- Point out the competition and how much better you are. This definitely helps, but don't make claims that you can't back.
- Include a marketing plan. Be as detailed as you can about how you plan to present the product to the general public.
- The most important part of your business plan is the writing of the financial forecasts that include total cash requirements, length of time for positive cash flow and projected growth in sales and profits. Projections should be for three to five years and projected income should also be included. All of this should be backed by assumptions that support your numbers. Try to be simple and accurate here; don't make assumptions that are not true.
After you are done writing all parts of the business plan, try having it read by couple of your colleagues or maybe someone who has already written one before you hand it to a venture capitalist to read. The advantage of this is that you may have missed small things that may be essential to your success.