Tips On Making A Business Plan |Chapter 3:My Company, Log 6|Colluide

Topic: Business Plan

According to Entrepreneur.com, “A business plan is a written description of your business’s future, a document that tells what you plan to do and how you plan to do it.” After the importance of a business plan was reiterated to me multiple times, I had no excuse to not have one now. As an accounting graduate student, I naturally kept all the receipts of every purchase made, I just decided that when the time comes I will develop my own accounting system. However, the business plan will consist of much more than financial statements. Consider the concept of an entire roadmap for your business that explains your current position and where you intend to go with it for success. The business plan is not a document just for investors, it is useful for any potential partner that is interested in fully understanding your business and products/services. Also, as large and cumbersome it may be it should be constantly updated as the business progresses. Owners will change just as much as the business and relevant changes to the business should be reflected in the overall plan. The issue that most entrepreneurs don’t want to take the time to write an articulate 50 page business plan. Admittedly, it’s a struggle, but the determination to properly layout your business will provide many benefits.

Persist

For me the biggest factors that I had to consider in building my business plan were explaining my product (SAAS), marketing strategy, and the current & future financials of my business.

Having a strong understanding of your product is vital to expanding a business plan. Elaborating on your product is an extension of your business pitch so they should match. As the creator of the product you should be able to document the current and future functionality of the product and business. Believe it or not, inventing or creating an idea is great, but the real significance is communicating that idea to people. After all what good is a product if nobody knows about it. There is always a challenge to relay it to other people; hence a specialized effort should be made.

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“Just because you invented it doesn’t mean that you can explain it”

 

To further add to the impact of marketing, I can testify that until I had to promote my own product I never valued sales or marketing struggles. People falsely correlate marketing solely with commercials, branding, and endorsements. Marketing starts with pitching, business plans, and even simply showcasing your product to interested parties. Figuring out exactly how your product will provide a solution to a specific target audience will help in developing marketing content to sell the product. This goes even further to analyze the marketing content for campaigns and find the best overall uses for the product. Partners or investors need to have a full understanding of your plans to endorse this product to the market. It is critical to perform the necessary research to provide impeccable demographics of target markets, problems that the product solves and detailed distribution methods.

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“Equal effort should be put in marketing your product as developing it”

 

Showcasing honest and detailed budgets, revenue forecasts, and even specific investing demands can make a big difference in a transparent business plan. Financial plans for beginning startups are tentative and typically wishful thinking at best. Those estimated revenue margins are rarely accurate, the budgets almost never match with actual expenses, and owners will burn out most investment capital that they receive. This isn’t the case for every startup but is very common for it to happen. Nonetheless, having some sort of plan in motion is a guide to success.

This is what investors would like to see, but they probably wish to be actively involved with the running of the business to ensure a ROI. For this purpose taking the time to develop an efficient accounting system is ideal too, seeking the assistance of an accountant is recommended. Record all accumulated expenses so far and use that information to anticipate future expenses. Using reliable forecasting methods to project revenues will help to convince investors of future revenue. Be sure to document everything with detailed financial statements to show your financial journey. Always disclaim your estimates by providing your reasonable explanation for reaching your numbers.

I used the product called LivePlan which made the business plan a lot easier and more presentable. Please ensure that your executive summary is a superb summarization of the entire plan. In other words, by only reading the executive summary, anyone should understand the gist about your product and if they need clarification they can dive deeper into the rest of the plan. Most investors are not going to sit down and read 50 pages of an idea that they have a high probability of declining.

imageedit_12_8800540979

 

“The executive summary may just be the most important part of a business plan”

 

Suggested Reading:

You Invented It, But Can You Explain It?

3 Elements Of Every Successful Business Plan

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105 thoughts on “Tips On Making A Business Plan |Chapter 3:My Company, Log 6|Colluide

  1. Ms.Biz on

    I really enjoyed the article, however I don’t think that it is necessary for every business owner to aim for 50 pages as some standard requirement. Some businesses may need significantly less or more to convey their idea thoroughly and as required. The best thing is to ensure that you are being highly detailed and presenting your information in a quality format that will be easily understood by potential investors or prospective business partners.

    Otherwise, great advise!

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