How to write a business plan | part one
Business plans can be daunting. What to put in, how much to put in, where to find what to put in and how to present them are all common fears you can experience when thinking about writing a business plan.
As this is quite a mammoth task, I thought I would break the post up into two parts, firstly how to gather your ideas and just start, and the second on how to structure your business plan and present it.
1. My first tip for anything that is daunting is – Just Start.
The sooner you just start doing something, especially if it something you don’t want to do, it will be instantly become a much easier task. You overcome that horrible little niggling feeling you get in the back of your mind every time you start doing something that you really shouldn’t be doing instead of writing your business plan. In other words, stop procrastinating.
Which is what I have been guilty of doing for the last week, catching up on other completely essential life tasks such as re-watching the first season of Grey’s Anatomy (again) instead of writing this blog post about how to write a business plan…
2. Write down everything you know.
Starting with bullet points or short sentences helps to just get the words onto paper (or screen) and you can fill in the gaps and worry about the format and structure later.
Google your industry, market and competitors. What information already exists out there to support your business case? Has anyone written any white papers or published any surveys or studies to back up what you are saying? If there haven’t been any studies already conducted then consider creating a short survey and collected the data yourself. The more evidence you have to back up that there is a real need or niche for your business the better.
Newspaper articles can also be a great source of inspiration for creating a narrative behind your industry. Although be sure that your work is original.
4. Put yourself in your customers’ and/or investors’ shoes.
What questions do you think they would want to be answered? Try to think, ‘if I were the person reading this then what would I want to know/see?’ The key things for me as an investor and as a potential customer are for the business plan not to be too long and overcomplicated. If in doubt, use your simple stick. This is a phrase I often turn to which was introduced to be by my good friend and former colleague Lizzie, if you can make things simpler and easier to digest then you absolutely should – cut the fluff!
5. Be interviewed.
This follows on from addressing what you think other people would want to know. Once you have a template covering what you think people want to know you need to put it to the test and see if you have addressed the key points and questions people have about your business. A great way to do this is to ask someone, or several people, to interview you. Doing this with your team, colleagues or even just someone you feel comfortable grilling you about your business can draw out some excellent points and uncover areas that you may not have thought about or delved into deep enough. This process can also hugely help when seeking investment as you will have already prepared answers to the difficult questions.
6. Get comfortable being uncomfortable.
Think about which areas of your business you know least about or would feel most uncomfortable talking about and make sure you address these areas in depth. You need to know every part of your business well and you also need to be able to withstand lots of people, especially investors, picking it apart. You can spot in a business plan a mile off where the entrepreneur has written reams of pages about what they know or find easy talking about and where they have skimmed around the parts they are less comfortable with and it instantly makes you think they are hiding something. For example, some business plans may cover a lot of market research into the market as a whole, but have then skipped over how they are going to actually reach the market, as an investor, I would pick at that gap and instantly address it when speaking to the entrepreneur. The same goes for financials.
7. Finally, keep things real.
I’m all for being aspirational and setting yourself goals but your plan and your business will be taken far more seriously if you set realistic and achievable goals.
Break your business plan down into SMART objectives, Specific, Measureable, Achievable, Relevant and Time-Bound. The more you have thought through your plan and a clearly defined strategy the more seriously both your customers and investors will take you.
Next week I will be following this blog post with advice on how to structure and present your business plan.
If you have any top tips for writing a business plan to share with fellow entrepreneurs please leave them in the comments below.