Vielka McFarlane - Tips for Drafting a Strategic Business Plan

One of the first things to do when starting a new company is to write a business plan. The primary objective in writing a business plan is to attract prospective investors to invest in your company. It is quite difficult for a start-up company to sustain itself without any capital. Many entrepreneurs do not take the time to write a business plan prior to starting their companies and therefore miss out on possible funding opportunities. However, whether you're just starting out or you've been in business a while, writing a business plan is definitely going to benefit you in the long run. Listed below are 8 tips for drafting a strategic business plan for your business.

1. Your Company Overview Should be Clear and Succinct. The first element of the business plan is the overview which explains your business purpose. Your company overview should give your compelling marketing message in such a way that people are drawn in just by reading it. The company overview should explain your solution to a need held by your target audience in a compelling manner. The overview is designed to entice investors to want to invest in your company.

 

2. The Proof is in the Proofread. Make sure you have your business plan edited by a professional or at least someone you trust who has a superior command of the English language. Your Business Plan should not contain grammatical or typographical errors. Simple grammatical errors or typographical mistakes are a sign of lack of professionalism and proof of laziness that will not appeal to investors. A business plan represents you and your business, so maintaining a professional image is everything.

 

3. Explain Your Unique Sales Proposition. In order to attract investors you must convince them that you and your company are in some way different than your competitors. No one wants to invest money in an area that is highly saturated or has been done a thousand times before. You must be able to give a summary about your unique wow factor and what you bring to the table that no one else does. Knowing your competition is important. You must be able to explain how you are different and in what ways you are better than the competition. Sometimes it just boils down to a having an edge on your competitors in one specific area.

 

4. Demonstrate How You Will Generate Income. You must be able to show and tell how you will make money in your business consistently. The buck stops with your ability to generate revenue. If you do not have multiple revenue streams for earning income, you will likely look like a huge revenue risk for any investor. Make sure you project earnings for each revenue stream by quarter and by year.

 

5. Project a Realistic Growth Strategy. You must be able to present a strategy for growth in your business based on short-term and long-term goals. Your strategy should include 3, 5 and 10 year plans for growth with metrics that will measure your success against relevant factors for your industry as well as supply and demand. Make certain that your growth strategy is realistic and not impractical.

 

6. Identify Risk Factors. In writing your business plan it is critical that you address any risk factors that exist or could potentially become a concern. It is a great idea to include information about regulatory, market, credit and competitor risk factors. Making an assessment about possible risks in your business will show potential investors that you are being considerate of their money prior to any monetary transaction has occurred. Demonstrating your ability to discuss and manage risk management will go a long way with potential investors and possible partnerships down the road should the opportunity present itself.

 

7. Reveal Potential Funding Sources. If you have already secure funding for your business, identify any financial institutions or possible funding sources for your business. Even though you are writing your plan to acquire funding, potential investors will want to know about any banks or other lenders who may be considering becoming a funding source for your business. In some cases, it may lend credibility to your business if you are already being considered by a reputable investment company.

 

8. Introduce Key Players. Make sure to highlight your management team. It will be beneficial if you have already secured talented and qualified professionals to run your company. However if you do not have your team secured, or if you are flying solo, make sure to present your background in a professional manner and list all of your unique talents, skills and core competencies.

 

Writing a business plan is a critical step in business. For many entrepreneurs, the process of writing a business plan is a perfunctory act and may even be omitted all together. However, a well written business plan can provide overall vision and the proper financial foundation for your company.