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7 Keys to An Awesome Business Plan

by Olufisayo
7 Keys to An Awesome Business Plan

Written by Dave Lavinsky for EntrepreneurshipSecret.com

I won’t sugar-coat it…writing a business plan isn’t much fun. But research shows a direct correlation between writing a business plan and your company’s success. And, without a business plan, the chances of raising outside funding to start or grow your business are slim.

So, if you must write a business plan, why not make it great. Here’s how to do just that.

1. Start with a Concise Explanation of Your Business

Don’t start your business plan with a long story. Rather, start by concisely explaining what you do. Particularly if you are seeking venture capital, your reader may not have a lot of time. And if they don’t understand what your business does in 15 seconds, you might lose them forever.

2. Explain How You’re Uniquely Qualified to Succeed

This is the area in which most entrepreneurs fail. They simply explain a few differences between them and the competition, rather than showing the unique attributes that support their long-term success.

Let me give an example. Suppose there’s only one pizza shop in your town and they only offer 3 pizza varieties: plain, pepperoni, and everything. You come up with a concept to offer 30 pizza varieties to satisfy the needs of more customers.

Is your concept good? Might it work? Yes. But importantly, you need to show why you’re uniquely qualified to succeed and why your competitor can’t just add more pizza varieties to match what you’re doing.

For example, maybe you have a special culinary background that enables you to prepare unique recipes. Or you will develop new operating systems that allow you to create more product options while competitors can’t. Or you’ll have a unique training program. Or a better system for storing the additional ingredients.

What’s important is that you think about these things. Because if you’re able to create a better mousetrap that your competition can’t copy, then you could become a major success.

3. Conduct Your Industry Research

You need to identify the size of your industry and what trends are affecting it. With regards to trends, the last thing you generally want to do is launch a business that ignores big trends. For instance, launching a new taxi company today probably wouldn’t be a good idea with ride-sharing services like Uber and Lyft continuing to grow in popularity.

With regard to industry sizing, make sure your market is large enough. For example, if you live in a town of 30,000, one, two, or maybe three barbershops could be supported. If there are already five barbershops, I wouldn’t recommend opening the sixth one.

4. Conduct Competitive Intelligence

You need to know who your competitors are. For local brick-and-mortar companies, this is simple to identify. For online or other businesses, this could be harder. The last thing you want to do is launch a business and find out there are several strong competitors you didn’t know about.

Once you identify competitors, assess their strengths and weaknesses, and identify where you will fall into the market. Will you be the high-quality provider? Offer the best service? Lowest prices?

5. Conduct Customer Research

The best companies know precisely who their customers are. Since if you truly know your customer profile, you can more effectively brand yourself to their tastes, and it’s easier to target them with your marketing.

If you’re targeting consumers, identify their demographic profiles. What is their gender, income, and marital status? Where do they live? And so on.

If you target businesses, where are they located? What size organizations are they? What are the functions and titles of the decision-makers?

The more you know about your customers, the more successful your company will be.

6. Create Goals & Milestones

Yogi Berra once said, “If you don’t know where you’re going, you probably won’t get there.” This is particularly true with businesses. You need to set goals if you want to achieve success.

Specifically, you should create 5 years goals, annual goals, and quarterly goals for the first year. Then, create monthly milestones. That is, what must you accomplish each month this year in order to reach your annual goal.

The process of identifying long-term goals and what you must accomplish in the shorter term to achieve them is the hallmark of great business plans and great businesses.

7. Create Realistic Financial Projections

If you are seeking outside funding, you need to present investors and lenders with a business plan so they can judge the potential ROI of funding you. But even if you don’t need outside funding, you need to understand the financial impact of your business.

Run through scenarios such as if sales are greater than expected. Or if your staff salaries are higher than anticipated. Things will never go exactly as planned, so you need to make sure you’ll have enough cash on hand to survive if certain events transpire.

When you sit down to develop your business plan, keep these seven keys in mind. If you do, you too can create an awesome business plan and business that stands the test of time.

Dave Lavinsky is the president and founder of Growthink. Growthink’s business plan template has been downloaded and used by over 100,000 entrepreneurs.  Dave has also written and published numerous industry-specific business plan templates for industries ranging from bars to software companies.

Photo by Med Badr Chemmaoui on Unsplash

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