Writing a business plan is by no means an easy job. There are many sections to include, covering off every aspect of your business. As such, it can be a long and complex document, leaving you having to strike a balance between giving insight into your idea and keeping your audience engaged.
Knowing what to include and determining what an investor or funder is looking for is vital in creating a business plan that presents your ideas in the right way and tells the reader everything they need to understand.
Most importantly, you need to focus on showcasing your value as a business, including your ability to serve customers, generate demand and create profit. Only this will encourage potential stakeholders to support you, with the promise of an excellent return on investment.
We’ve listed 11 things to consider when drafting your business plan to help you present your venture in the best light, leaving you with a seamless document that boosts your chances of funding success.
Optimise every section
Every part of your business plan is instrumental in how successful the document is as a whole. Each section has a role to play, offering in-depth detail about different elements of your enterprise. As such, you must craft each section carefully, providing the correct information and showing your business’s strengths in that area.
Over the last few weeks, we have explored how to craft each section of the document to give yourself the best chance of securing investment in our guides. This includes:
- The executive summary
- The company objectives and structure
- The value proposition
- The market analysis
- The financial plan
- The operating strategies
- Sales and marketing strategies
Consider each section a plan in its own right. Ask yourself what an investor wants to know and how your business will excel in that area. By determining what you need to cover off in every part, you will be able to offer the proper insight and highlight the potential of your business. This will show that you have considered every factor of running a company, leaving no room for error once you get started.
… but also make sure it works as a whole
Although each section is significant in its own right, they all must function as part of your broader business plan. This means ensuring every piece of the puzzle fits together and that the claims you make in one section marry with the claims you make elsewhere.
Let’s take your financial plan, for example. All the revenue, cost of sales and overheads you have projected here must align with the cost implications you have stated elsewhere. If you’ve outlined that you will spend £5,000 on your marketing strategy in your first year, you can’t then promise a campaign with tens of thousands of pounds of activity. If you did, it would raise questions about your financial understanding and the integrity of the plan.
Once you have created your first draft of the entire business plan, it’s worth going through it all (or have someone else do this) to make sure there are no disparities or inconsistencies. This will allow you to connect every section, so you’re left with a fully optimised, complete document.
Tailor it to the investor
You’ll most likely need to pitch to investors on more than one occasion. Every investor is different, with varying motivations and preferences of what they’re looking for in a business. As such, there isn’t a one-size-fits-all fix when it comes to presenting your business plan.
Be prepared to adapt your business plan to who you are targeting. If you have any prior knowledge about the investor, such as their interests, other businesses they’ve worked with or their experience, utilise it to determine what they might want to see.
Then, tailor your plan to meet their needs and drivers. This doesn’t mean changing your plans or who you are as a company – instead, focus on reframing your ideas in a way that will appeal. This will give you a better chance of ticking their boxes and gaining support.
Utilise data
Data is beneficial when you are crafting a business plan. It enables you to analyse the existing market, your competitors, and your customers. Most of all, it provides a realistic prediction on the trajectory your business could follow, including what profit and sales you might expect to see over time.
There are many ways to access data. You could utilise your own, such as financial history, competitor analysis or customer research. Alternatively, you could look at existing data about the market and how it relates to your plans.
When you do use data, you must know where it comes from. Ideally, it should be from a reputable source, and you need to be prepared to share that source with investors so that they can fact-check your claims.
By incorporating data when appropriate, you can give evidence that backs up your arguments and convinces investors that you’re making achievable promises.
Know your customers
Without customers, you don’t have a business. They’re critical to your sales, revenue and profit – so you need to understand them very well.
Every aspect of your planning should be tailored to serve your customers. This means understanding their needs and challenges, so you can present your business as a solution that offers them the best products and services in the best way.
Showcase this inherent understanding of your customer throughout the business plan. It will help you refine your efforts and explain to investors why you have made your choices. If you can serve your customers well, it will also lead to better results for you and prevent them from turning to your competitors – which spells better ROI for investors.
Incorporate competitor analysis
You need to include competitor analysis into your business plan for two reasons.
Firstly, it shows the state of the existing market, including what has been proven to work and where the gaps are. You can then focus on filling those gaps and building on industry strategies to fuel your success.
Secondly, your competitors are your threats. They can detract from your sales and, if they overshadow you too much, you can quickly experience falling profit and become obsolete. So, you need to identify how you will have the edge over them.
Utilise competitor research in the relevant sections of your business plan, such as the market analysis and value proposition. You may also use it in the financial, operating and sales/marketing strategies sections to inspire your planned activity and learn what works in the market.
Most importantly, focus on how you will stand out from the crowd, whether it be by serving new audience segments, improving on a product or just offering exceptional service. This will help you generate a more significant market share, which will be welcome news to an investor.
Fact-check
At a minimum, everything in your business plan should be accurate and honest. If you make false or unsubstantiated claims, it’s a red flag to investors that your business isn’t as valuable as you suggest it is or that you haven’t carried out enough due diligence.
Once your business plan is complete, double and triple-check it. Ensure that any data you’ve used comes from trustworthy sources and you’ve understood what it’s saying correctly. Re-run any numbers to flag any potential mathematical errors. Look out for any claims you’ve made that you can’t back up when asked.
This will stop you from getting caught out by a silly mistake and allow you to remain credible to investors.
Include enough detail
The business plan is meant to be an extensive document, showcasing everything there is to know about your company. As such, you must include enough detail about your business so that the investor learns everything they could want to know.
Don’t be afraid of providing too much information, it can always be attached as an appendix. If it’s relevant in proving the potential of your venture, include it. Just make sure you add it into the right section and focus on the point you need to make to avoid rambling.
By providing all the necessary information, you can offer the complete picture of your business to investors and leave no stone unturned.
Get the financial information correct
The investors you are presenting to are considering whether they should give you their money. Naturally, they want to be confident in your ability to handle it and turn it into profit that you can offer back to them.
The best way to convince them of this is to make sure the financial information you provide is flawless. When making financial projections, ensure these are founded on accurate data and that all the numbers add up. You should also make sure they align with the rest of your business plans.
By ensuring that you’ve correctly predicted your finances, you can effectively show investors that they can trust you with their money.
Be engaging
Although the business plan document is long and full of complex information, it still needs to be engaging. This will keep investors interested in your business and compel them to support you.
Focus on the value your venture will offer and use that as the central thread of your plan. This will help you to return to your business’s strengths, even after presenting high volumes of data, so that you can keep investors engaged.
Get a second opinion
Finally, ensure you get someone to take a look at your business plan once it’s finished and before you present it to an investor. Having a fresh set of eyes to look at your work is an excellent opportunity to get a new perspective and highlight any issues you might have missed. It’s also a great way to flag any spelling errors or typos.
Ideally, you will want to get someone with funding and business experience so they have enough understanding to spot any issues. However, they should be removed enough from your business that they can be impartial.
If you don’t have any contacts who could help, it might be worth seeking the assistance of a business advisor who can work with you to optimise your plan with an understanding of what an investor wants to see.
Conclusion
A business plan is an essential tool for businesses seeking to secure the funding they need to achieve their goals. By ensuring each section is fully optimised and aligned to the investor’s wants, you can increase your chances of winning over their support.
If you need support in creating your business plan, we can help. Our team of advisors has worked with diverse businesses to craft efficient strategies that represent their ideas in the best light.
We can also put you in touch with relevant investors with interest in your venture so you can take the next step in your journey.