Business plan: dos and don鈥檛s
A list of things you must do when creating your business plan and things you don't want to do in order to avoid mistakes.
A business plan focuses on your business strategy and what you need to do to achieve your goals. It can help to gain investment. A business plan can also monitor progress and success within your business.
When creating your business plan, consider the following list of dos and don'ts.
Business plan dos
- Know your audience: Always consider the purpose of the plan. For example, do you want to target a supplier or are you hoping to get funding from a bank or an investor? If funding is your priority, the audience will be interested in what they will get for their investment. You must adapt the plan to the reader. Ensure that the key messages resonate with them.
- Be engaging: Outline your business idea in a persuasive and positive tone. You want your proposal to stand out. Ensure you highlight your key/niche selling points.
- Be clear and concise: Make the business plan easy to read. Structure the document into meaningful sections and use headings.
- Show thorough knowledge of your market: Demonstrate clear knowledge of your target market, your customers and competition. Show a clear understanding of the potential size of the market. Conduct research and include credible data sources to illustrate that your idea has the potential to maintain long-term growth.
- Provide detail and answer important questions: Address how you are going to develop your business, when you are going to do it, who is going to play a part and how you will manage the finances.
- Know your numbers: Demonstrate a consideration and understanding of costs, price points, market size and profit margins. Attempt to provide accurate numbers in your financial forecasts. An investor will be interested in if the business is scalable and whether there is an opportunity to grow. Alongside your financial forecasts it is good practice to show that you have reviewed the risks your business could face.
- Present in a professional format: Use images, graphics and tables to illustrate key information where appropriate.
Business plan don'ts
- Don't be vague - avoid including unrealistic information you cannot substantiate.
- Don't include technical jargon - don't assume that the reader will understand the technical aspects of your business or sector.
- Don't exclude the essentials - don't leave out important details, facts and figures.
- Don't make things complicated - avoid making your business plan overly complex.
- Don't dispense with your business plan - don't forget to regularly review and update your business plan. It's a working document that will help you to focus on your vision and objectives.
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