Entrepreneurship is like a rising superstar these days. People are coming up with new and innovative ideas and many of them are getting decent funding to run their own show. But guess what? Very few of these businesses are surviving. So here comes the death of stardom!
Here’s a not so fun fact: According to Bloomberg 8 out of 10 businesses fail in the first 18 months and a whopping 80% crash and burn!
Why do they fail? To pin down a few reasons: Pre-mature ideas, management flaws, bad leadership, limited cash flow and lack of proper planning. Without proper planning and management, the business will stray from the right direction and plummet much faster than it took to build up.
How to get the right direction?
This is straight forward. Plan everything before you start out otherwise chances of failure will be high. Keep these primary goals in your brain and book:
- What do you want from the business?
- How is your business solving the problem of the audience?
- How big is the market?
- SWOT analysis of yourself, competitors and more.
Make sure these goals are documented on paper so you can easily communicate ideas and objectives to the team. Don’t expect to make millions of dollars without a proper written out and anticipated plan.
How to write a business plan?
Research is your best friend. Find out whatever you can about businesses, market and competitors, this will give you a head start into drafting a business plan. I think this step-by-step guide by Entrepreneur.com is rather helpful. I’d suggest this as a compulsory read for those who want to write up a business plan for startups.
What to consider when writing a business plan?
Unless you take these points into consideration, the whole process of writing a business plan will go to waste. If you follow these points, you’re more likely to draw an effective business plan.
- Use the ‘Highlighter Rule’
How is your business different? How is the market shaping your predictions and presence in it? How do you plan to sustain yourself in the market? What does your competitor have that you don’t?
These questions will be running a marathon in your mind, and they should, especially when you’re writing a business plan.
Sometimes information is useless in certain areas or circumstances so remember to keep a handy highlighter with you. This way you can mark out the important points from the less important ones.
- Think about your Target Audience
Many times they forget the audience/reader of a business plan; this is quite a common mistake. In order to convey the important points in a business plan you need to know what kind of audience/reader is going through your work.
Business plans will differ; you won’t share the same one with the investor and team. The investor will be shown target sales number and predictions on growth but the team will focus on technical problems and solutions.
It’s best to write a detailed business plan so that alterations are possible later on in accordance with the audience you want to appeal!
- Use Reliable Market Research
The best and worst part about online information is that it’s free. It’s the best because you can access hidden treasures without hassle or payment, but the worst part is that such ‘free’ information can easily be manipulated.
Avoid using free information about the market when drawing a business plan! Do you want to know how big the SaaS market is in the United States? Don’t google the answer to this; instead buy a market research copy from any prestigious company.
Also using free research could backfire especially if the investors are well aware of the industry and market. Still feeling unsure about how to use data for your startup? Well here is a quick answer for you!
- Think about Dimension of the Business
Startups usually sprout out of people with a technology or business background. When they write a business plan most of the focus is on information that they’re experts on.
For instance, a technician is most likely to concentrate on technology and how it’s different from others in the market. If the plan is written by a business analyst, then sales numbers will be the central idea in it.
In reality, the business plan should encompass a broader vision, from technical details, sales numbers, marketing strategy to profits. It all needs to be in one place whether you’re showing it to a salesperson or the CEO!
- Have others review your Business Plan
Don’t ask your friends and family to review it! Look out for people who are leading pioneers or experts in this field, also known as Mentors. Reach out and hand them your business plan.
With the help of mentors, you could get helpful advice and make improvements or changes to your plan.
They are a source of great assistance because their experience and knowledge could prevent you from making mistakes. This minimizes risk and increases your chances of being successful.
Have you ever written a business plan? Do you have any exciting stories regarding it? Share your thoughts in the comments section below.Business & Finance Articles on Business 2 Community