If you need funding to start or grow your business, you need a business plan. However, a business plan alone will not assure funding. Your plan needs to be solid. And it needs to be better than the other plans investors or lenders are viewing.
So how do you stand out amongst the sea of business plans being submitted to funding sources? Below are five keys to distinguishing your plan from the rest. First though, I suggest you use a good business plan template when creating your plan. A good template will include the questions you need to answer in your business plan. This will save you time and ensure you don’t miss any key points.
Start with Brevity
Readers of your business plan don’t skip to the middle. Rather, they start with the first paragraph of the first page. If they like what they read, they’ll read on. If they don’t, they won’t.
As such, the first paragraph of your business plan is the most important. In it, you must concisely explain the nature of your business. Don’t tell a story. Don’t go into a complex discussion of your business. But do succinctly describe what your business does so the reader understands the premise of your venture.
On the rest of your first page, known as the Executive Summary, give a concise description of the other key elements of your business plan as follows. Document the customer segments you are targeting. Detail the size of your market. Identify your key competitors. Describe the key elements of your marketing plan. Show your financial projections and funding requirements. And identify the key members of your management team.
Identify Your Unique Qualities
Businesses that lack unique qualities are bad investments. If there’s nothing unique about your organization, it’s too easy for others to copy you, which would eventually drain your profits. Successful companies have unique qualities. Sometimes these qualities include great management teams with significant experience. Something they includes intellectual property. Oftentimes they include agreements with customers and partners that ensure long-term sales. Whatever your current or planned unique qualities, be sure to document them in your business plan.
Look and Feel Counts
If I didn’t include any returns and this article was lines and lines of text, would you read it? Probably not. Likewise, if your business plan is hard to read, investors and lenders won’t waste their time.
While your business plan doesn’t need to look like a professionally designed brochure, it needs to be user-friendly. Have lots of white space, charts, graphs and pictures to help make your points while making the document more accessible.
Include Realistic Financials
Investors and lenders care deeply about your financials, as they want to make sure they’ll get a return on their investment. Be sure to explain how much funding you need and what you’ll use it for. Also, be sure to include your financial projections, mainly your Income Statement, Balance Sheet and Cash Flow Statement.
In creating these projections, be sure to use assumptions you can support. For example, it’s very easy to say you’ll double sales each month for the first year, but can you actually do it? Have you identified other companies, perhaps in different industries, that have achieved such growth in the past? It’s very hard to support assumptions that no company in the history of the world has achieved, so don’t include such assumptions or you’ll lose credibility.
Show Your Past Accomplishments
The best indicator of future success is past success. So be sure to include all your organization’s successes to date. Even if those successes are limited to items like choosing a location, they show you know how to execute.
There are too many dreamers out there who can only dream, and just can’t execute. Show what you’ve been able to execute on as it will give readers confidence that you’ll be able to continue executing once they fund you.
By following these five keys, you will distinguish your business plan from others. You will impress investors and lenders, and put your company in the best position to raise funding.