As with any new business, you will probably need some investment to get your operation off the ground. To get any business financing, funding, grants, loans or investment to support your operations, you will need a detailed business plan. Here’s how you do it!
1. Start with competitive research
You will need to have some detailed knowledge of your competition. Being prepared here is essential as you may need to ask some questions on exactly who your competition is and how you plan to carve out some market share for yourself. Be careful not to say anything negative about your competition. You want your analysis of them to be impartial and fair, this will make the assertions about your own business seem more reliable.
2. Read the room
You should be prepared to tailor your business plan to suit those that you are presenting to. Having a version for bankers and another for individual investors is essential. You need to make the material as accessible as possible for those who you are presenting to.
3. Gather evidence
For every statement that you make you should have some research to back it up. You may have to defend some of the assertions that you make, so get ready. If you expect to dominate the market in less than a year, you need to be able to explain how you have come to that timeline. If you mention the strong management expertise or industry knowledge that your team has, be sure that you have the resumes of your team ready to back up these statements.
4. Don’t be too optimistic with financials
If you are conservative with the projections that you make you will get a better reception form the people that you are presenting the business plan to. If your research leads to you believe that you can get 50% of the market in a year, then submit projections of 30% as you want all of your numbers to be achievable to even the most pessimistic investor or lender.
5. Be realistic when it comes to timelines
As you are a new business you will not have the resources and personnel that you are used to elsewhere, so something that now takes you a few hours may take up the whole day. For this reason, it is best to make sure that you give yourself realistic timelines to complete each stage of the project. It is a common mistake that many first timers make when writing out business plans and one that investors keep a sharp eye out for.
6. Think like a banker or investor
The money you are asking for is either funds that they are responsible for or their own money. For this reason, you need to give them a very good reason to invest in your business. When writing your business plan you need to make sure that you are certain you are presenting the information that you have put together in the most effective way.
7. Explain the payout options
Once you have convinced them that your business is worth investing in you need to have some details ready about when the investors can expect a payout. This is what they really want to know about now that they believe in your business. You should outline the options available for investors or at least offer to discuss options with any serious parties.
8. Don’t oversell yourself or the business
The business plan needs to be solid enough that it can stand on its own without theatrics or salesmanship. Your investors will be looking for hard numbers and good research.