The two main purposes of a business plan are: it gives you clear picture of your future business and what you can expect, and it helps you get additional financing. If you are entering the business by yourself, then you need to have a business plan, end of story.
Many types of research have shown that one of the main reasons why many startup businesses fail is because they don’t have a plan. A lot of people want to start a business, but not many of them have the necessary skills to succeed. Good news for all those future entrepreneurs is that business plan is not that hard to create.
Get familiar with your business
If you want to prepare a business plan, you need to know the business to details. This considers a lot of research, and it comes in two forms. You need to read everything about the industry you are planning to enter. This may take you a lot of time, but it will pay off in the end.
Face to face conversation with people who are in that type of work like you are can be priceless. From the first hand, you can hear their experiences, and they can provide you valuable pieces of advice. Every day learn as much as you can.
What is the purpose of your business plan?
A business plan’s main purpose is to create a clear path and to guide you towards your visions. On the other hand, it can attract potential investors. If you are financing the business by yourself, you can accommodate the plan based on your needs. If you are searching the investors, you will need to create a plan that will target only them. But, before you make a plan, decide do you need investors.
Target your audience
If you intend to target the investors, you need to make a plan that will attract their attention. Outside investors, who can be your relatives, friends and banks may invest in your business through a loan or shares. Every potential investor is looking for four things.
They need to be able to trust in you. Show that you are the person who has an integrity and attitude. Your business plan should reflect those qualities too.
You need to understand the business. You need to present clear ideas, how you are going to attract the clients and how you are going to make money.You have to show that you are financially confident. Carefully calculate the risks. Investors need to know that they can charge their investment whether your job is filling or progressing.
Provide them a good return. Investors expect an average return of the investment between 2% and 5%.
Create a business plan
Once you have performed all the task above, it’s time to create a business plan because it will guide you on your future business. On the other hand, it has to give a good message to a potential investor and attract him to invest money in your project.