Top Ten Tips for writing a successful Business Plan
Top Ten Tips for writing a successful Business Plan
“10 tips” towards creating a successful business plan
In order to write an effective business plan one needs in-depth knowledge in several domains: economics, human resources, relevant markets, technology , organizational structures and more, all of which must be combined with a strategic vision and a good understanding of tactical business maneuvers. Ignoring any one of these elements will result in the creation of a misleading business plan and could ultimately lead to failure, and the loss of a venture and potential investment.
What makes one business plan better than another? Which sections of a business plan, if any, are more or less important? Which part of a business plan should you concentrate your time, effort and resources on the most?
Here are 10 tips towards writing a successful business plan:
Detail the added value of your specific product or service
define and identify the relative advantages of your product/service over others in the market. Two driving forces typically influence your appeal to consumers: The first is “pain reduction”, the second “increasing pleasure”. A business plan that does not clarify which difficulty the new product/ service can eliminate and/or which pleasure or convenience it can enhance, will most probably fail to convince potential investors to invest in the venture.
Identify your target consumers
define your potential client in terms of their socioeconomic status, income, residential area, academic background, consumer habits, familial status, age group, gender, employment etc.
Familiarize yourself with the market in which you intend to operate
conduct a detailed survey of the relevant market and familiarize yourself with its characteristics and the latest trends. Examine the market’s size, growth rate, and define the market sector you intend to target.
Know your competition
study both your direct and indirect competition – this will help you define your best business strategy. Analyze your competitor’s ability to duplicate your business model and innovation.
Create a simple business model
build a clear and practicable business model that clearly defines your income sources and channels.
A good business plan is based on a solid foundation of predefined suppositions derived from a detailed analysis of the market, and of real-time data from competitors in the relevant market.
Market your product/service wisely
the price of your product/service will be one of your potential clients’ primary considerations. Determine a price for your product/service with consideration of demand, competitors’ prices and your sales targets, while keeping in mind your product/service’s added value.
Define targets
set clear short and long term goals. These can be defined by financial quarter, 6 months, year or over several years. Goals can be “rigid” – such as sales targets or market segment, or more “flexible”, such as general brand awareness or product differentiation goals.
Build a winning team
this is one of the most important elements in a business plan. Your human resources will show potential investors who they are really investing in. Tell investors about the different members of your team, why you think they are suited to their role, why you have faith in them, and how you will all work together.
Provide detailed forecasts for cash flow and Return on Investment
cash flow data, as derived from operating activities, is incredibly important to investors and integral to any analysis of income and net profits. Cash flow estimates are truly one of the key elements that will decide whether your venture is a Go or No-go.
Build a realistic business plan
valuing your product / service too highly will raise suspicions from the first page. We all know how easy it is to be blinded by our passions, however, this blind love manifests itself in business plans when you begin to emotionalize your product or lose the ability to be critical and begin ignoring real business threats. These are signals that will alienate investors. It is dangerous to fall
in love with your idea – and as difficult as it may be to avoid, it is necessary that you maintain a critical view of your venture in the long term.
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I’ve found in my recent years that most businesses actually find it hard to write down their business plans… Your idea’s give great guidance!! I also believe what would make businesses go through this process easier would be for them to get more [Clarity] on:
What do you want to achieve from your business?
Why do you want to achieve this?
What difference would this make in your life?
Why do you want to make changes?
Where do you want to be in a year from now?
The more questions you can ask yourself, the more you dig deeper and the better your answers will be and you’ll get to the true reasons why you want to do what you set out to do!!
knowing the really true answers will give you better direction in producing a more clear business plan that MEANS something and it will give you really direction to move forward!!