If the business world were structured to produce out of the blue enough resources for anyone with a brilliant business idea, things would look and feel pretty different in the field.
You could wake up one day having shaped, overnight, your business vision into something concrete and achievable and you would find a convenient pile of money, tools and teams right on top of your bedside table, ready for you to direct and make good use of.
However, would it sound meritocratic enough? Would the business warrior in you be satisfied with such sort of un-challenging and very passive scenario? Would it be demanding enough to provide some sort of entry barrier?
Definitely not, actually.
Good news, the chances of you finding anything you need, business-wise, on your bedside table in the morning are extremely close to none, so you have to make sure to get up and actually do something yourself. Struggle a little bit, strengthening your resilience muscles and wearing your best suite to pitch yourself thick and thin.
To help you get along with this, there’s one extremely important tool that you need to use - besides your best suite - and it’s called Business Plan.
A business plan is the thing you need to make up for the fact you don’t find money on your bedside table every morning
It’s the thing that’s going to provide persuading facts to anyone who’s going to lend you resources in exchange for a return: financial aids, structural resources, human capital and anything under the sun you can think of as essential for the existence of your business.
Second good news of the day, this business plan is actually achievable in a very straightforward way, without you having to spend 1.578 days on it or - considering the weird theories that often go around this topic - wait for the next full moon.
Be fast and emotionless in delivering initial, mandatory facts
If your plan is to manufacture a new kind of washing machine, say it without touching on your grandma’s washing system. Investors don’t value emotional attachments, they value their time and their unwillingness to focus on something they don’t care about for more than 15 seconds.
Emotional attachments are incredibly powerful for a business, but their best place is out of your business plan. So the best decision is to treat your information as a scientist would treat the results of an empiric experiment. He might be thrilling with excitement, but you’ll never know by looking at its formal report.
Make sure you never forget that business plans are written to persuade investors and stakeholders to provide their money or resources to your business.
You are basically standing in front of a group of people, in front of a bank or an institution, that possess something you need. Your aim is to get that something despite the fact they will always start off by not wanting to lend you anything.
Proving them they’ll miss out if they don’t is the only thing you should care about when writing your business plan. Nothing else matters.
To achieve the task at hand, you have to be taken seriously.
Don’t even consider the possibility of your nerves making you a little shaky when you speak, breath or resist tears of frustration. Be kind and respectful, be nice, but while you are those nice things, make sure you also exude a sense of relaxed confidence, a sort of inner certainty that will take you a long way. If you don’t feel it, fake it, starting from the moment you sit down to write your business plan.
Now that you know what the right mindset feels like, you need to tackle a few necessary steps whose purpose is to make sure the plan - in its written form - does include all the information any stakeholder would want to look at, and possibly in the ideal order
When starting a new business, or even expanding an existing business, any entrepreneur must possess deep knowledge about all key components relating to the field they’re venturing into to as a company. This element is the starting point of a successful business plan, simply because it targets the core of the very first question that crosses the mind of any stakeholder:
How much do you know about what you annoyingly want to sell us?
To keep it simple and easy to digest, address only these key points
What is the business about?
What is the potential / why is it interesting?
Needless to say, opinions do not count in here. You need to show data dressed as tables, to include stats diagrams, all the while possibly avoiding being over-descriptive. Remind yourself that this is not an English assignment, this is the real deal that will bring resources to the table and data-over-opinions is a mandatory rule.
A business plan is, for certain, not a theoretical document. It must be practical and tangible, realistic from A to Z.
What’s one tangible asset that stakeholders will want to look at? Human capital. Aka, the team that’s going to hustle for success. Aka, from an investor’s perspective, the critical mass that will perform and execute any necessary operations to make sure investing was a brilliant choice and not a complete disaster.
Now, here’s the bit that’s going to upset the easily offended:
If you’re going to tweak around a little bit somewhere in this effective business plan, make sure you do it here and now, inside this section. Don’t lie immensely, but don’t even admit that you wear too many hats if that’s the case. Don’t say your workers are two and a half, the half being you in your non-existent spare time from the CEO, CFO and CTO roles.
Take the risk of telling a white lie: who on earth can afford to have a fully formed team or multiple fully formed teams in the early and delicate phase of kickstarting a business into shape? Not many, right? Investors know it well. They just like to pretend they don’t, but they won’t find it outrageous to discover your employees are ten instead of fifteen. If fifteen sounds better on the paper, then go for it.
And then, without further ados, jump straight into a detailed and well-pictured representation of how your team will look like after funding. You don’t have an army at your disposal right now, but you’ll have your dream team together once you get the financial resources, and everyone will passionately work together to accomplish great things (and provide stakeholders with the return they’re seeking).
Once the goal is clear and you have hinted at the net of people that’s going to make it real, it’s time to talk about the how.
How you plan to do what you need to do is extremely important, and this section should reflect that.Any business is a complex machine that runs smoothly only when the operations are efficiently planned and productively performed.
Money without processes is wasted, much more so than ever: how you do something is often the competitive advantage that sets your business apart in a sea of competitors and makes you thrive.
Just to be clear, you don’t have to give away any business secret or any peculiar know-how.
This is not about sharing the full strategy, this is about your company’s general approach towards transforming specific inputs (which can be something as concrete as raw materials or something as abstract as an idea) into specific outputs.
Providing evidence that your business logic is on point can be as simple as describing a realistic example that shows how cost-effective your business will be in performing X, Y and Z to reach result A.
If you find it difficult to provide content for this section, try touching these points:
Will your business be structured to be faster / more reliable / more innovative than the competitors
Will your business be more adaptive to change
Will your business be the change maker in the field
How defining will your operational structure be in achieving success
When a product or service isn’t marketed effectively, there’s room for a lot of wasted efforts sadly piling up in the warehouse or getting dust in the form of unused know-how.
What’s really sad for stakeholders is that any kind of finished goods overstock or untouched know-how equals losing money, and losing money is something they spend their lives running from. So, don’t expect them to greet your idea with a grin on their face if you don’t detail a well-rounded marketing strategy.
How on earth is your potential customer base going to find out about your business and, most importantly, buy your product or service?
This is a key question that deserves a smart answer inside your business plan.
With all the technologies available, you and your team had better get creative and build a marketing plan that’s going to realistically take you from unknown to sought-after in the shortest amount of time.
An effective business plan should always include a schedule highlighting all major events required to launch and grow the business.
Any milestone that’s important to the stakeholders shall be considered.
The desired side-effect is that a forecasted timeline automatically gives the impression of something true, tangible, reliable. Results are going to happen, stakeholders will have their returns, you’re not asking them to play with castles in the air, but to have their part in a business adventure that will collect success after success with the precision of a compass pointing north.
It’s easy to forecast special events that will happen in your business, just think about the first big deliveries, the first team expansion, the first launch on a new geographical market and so on with any milestone that you are going to celebrate.
When it comes to the soft spot of an effective business plan, the key point revolves around numbers.
Not any number of course, but financial numbers, financial figures that summarise everything that was addressed in the previous paragraphs of the plan, translating all the concepts into a long-form flow of forecasted earnings and expenses.
You have described what you want to do, who’s with you on the journey, how you intend to do it, how and when you’re going to market it and now, what’s left to do is to re-state everything once again by highlighting the economic value of every single step.
Following the timeline you’ve set, create the flow of expenses that you need to be able to cover to go through the entire process described, then do the opposite, describing the earnings you’ll get with every milestone.
After that, highlight the balance, resisting the temptation to brag about it. Remember, you may be burning with excitement, but the business plan is not a good place to let feelings free. The more emotionless you manage to be while you write, the stronger the impact you’ll generate on stakeholders.
It’s no doubt for anyone that you’re passionate about what you’re doing, otherwise you wouldn’t be letting yourself in for such an adventure. What people - and stakeholders - need to know is how well versed you are with what you are presenting. They need to trust you, before saying yes to anything you’re asking for.
They know their stuff and they are 100% oriented towards the forecasted results is what investors should ultimately think
One of the most interesting and heart-warming parts of business is that, since no one really gives away resources as a gift, everything that you obtain is a reward for your talent, passion, skill, courage and effort. There’s something incredibly satisfying in this process: you put in all those elements and you see them becoming something greater, something stronger that’s commonly described as Value. This value touches other companies, other teams, other people and then comes back to you in the form of any kind of reward you can think of: financial stability, customer happiness, positive cash flow, customer loyalty, brand recognition and so on.
We sincerely hope the tools you discovered today will guide you through the process of creating the most effective business plan you’ve ever dreamt of and we hope this business plan will open many doors ahead of you, each one more interesting and fulfilling than ever.
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