Ask any entrepreneur why they need a business plan, and they will say: to attract new investment to my business, so that it can grow. But business plans are often a cause of great stress and concern for those who write them. Justifiably so: get it right and you can secure your investment and grow your business; get it wrong and you may blow your chances of success.
Your business plan is the medium that you use to communicate to potential investors what your business does and how they will be able to make money from it. You should think of it as an ‘investment pitch’. It should give potential investors a clear understanding of how they can benefit from the future growth of your business. A business plan is all about putting yourself in an investor’s shoes, and focussing on their agenda, rather than your own.
Contrary to popular opinion, a business plan should always be concise and simple. It does not require excessive detail or reams of numbers. Likewise, the process of creating a plan need not be difficult or complicated.
When writing business plans, many people feel compelled to overburden them with words and information, believing that will make them seem weightier and more impressive. This is absolutely the wrong approach. In fact, the opposite is true: the fewer words the better. This is an area in which less is definitely more. You need to think of writing your plan as something similar to writing a song: you don’t have endless space to fill, because of the constraints on the length and structure of the song. You are forced to express yourself in a compressed space, often using very few words. An ideal business plan will follow the same principles, stating only what is absolutely necessary.
Your business might be anything from a raw, entrepreneurial start-up to a well-established, multi-million-pound firm that employs hundreds of people. In either case, the challenge is the same: you will need to raise investment money, typically with the aim of growing your business and taking it to the next level. The only real variation is in the size of the investment you need, and who you would approach for the money.
The same principles apply to a business plan whatever the type and size of the business it is for. Specific content and other details will of course vary from one type of business to another, but the fundamental structure and objectives will be remarkably consistent across all businesses.
Getting the format of your plan right is more important than it may seem at first glance. No matter how much time, money or passion you have invested in your business idea, all of it can easily be wasted by sloppy or amateurish presentation. A properly formatted business plan that is visually consistent and professional in appearance sends a strong message of competence to a potential investor, and makes the content far easier for them to read. Good formatting is not particularly difficult – and thus there is no excuse not to ensure that your plan looks as impressive as possible.
An advantage of getting your structure right at the outset is that it maps out the content that is required for each of the relevant pages of your plan. In effect, it gives you a roadmap as to where you should be going, and what you should be saying when. I guarantee that it will save you endless hours of work, allow you to produce relevant content quickly and thus prepare an effective plan.
It is no different to writing a novel. You wouldn’t expect to blindly start scribbling away on a new thriller without having a vision as to what the story will be, including its essential twists and turns. A business plan must be approached in the same way.
In short, structure is crucial. Fortunately, it is easy to get right once you know how. Best of all, when you have the structure in place, you know you have done the hardest part of creating your business plan. You will have a guide as to what the content should be on each page and thereby a roadmap to completion.