Well done! You’ve decided to write a business plan. A reported 70% of businesses skip writing a business plan, assuming they don’t need one. Unfortunately, 80% of businesses fail within five years, showing they were very wrong. One reason they might have gone without is because writing a business plan seems complicated – it’s not. When you start preparing yours, make sure you’ve considered the following four tips.
1. Know your USP. Sell it.
When you market your business, you’ll need a Unique Selling Point (USP). This is the aspect of your business that makes you stand out from the rest. The same logic applies when you write a good, simple business plan. If you blend in with the competition, you’ll fail. Customers need a good reason why they should ditch their current favourite and try you out. Explain your USP and sell it effectively in the business plan.
2. Identify your market. Assess the competition.
These two points are also critical to writing a business plan. It’s unrealistic to market your services to everyone, so specify your target audience. Consider various factors including age group, gender, disposable income, location, occupation, and work position. Now you can clearly see if your product matches your target market or not.
Now research the competition. Look at the small fish and the big ones. What are their USPs? How do they market? Who is their target audience? How much do they charge? What services do they offer? Where are they based? What works for and against them? Compare your business to theirs for an honest view of where you stand in the field.
3. Increase profits. Reduce losses.
When you write a business plan, include a profit and loss forecast. Using key information like your projected income, expenses, loans, and the seasonal changes in demand, you can produce an accurate forecast of your monthly and annual turnover. You’ll need this to convince investors that they’ll be repaid in a reasonable amount of time.
Look over the figures to see where you might reduce losses and increase profits. Could you charge more for your product? How can you cut back expenses? If a simple business plan doesn’t make money then very likely your business won’t either. Don’t give up! Look over the figures again and see where heavy losses, or lack of profit, are.
4. Get constructive criticism. Listen to it.
We’re poor judges of our own work. Using a bad business plan is risky. If you think it’s feasible, but you’re wrong, you’ll find out when it’s too late. Your business will go bust and take you down with it…Getting other people’s opinions now is best. Ask honest people to read the business plan and see whether it works. They should ask critical questions like “Is there demand for this service?” and “Do the numbers add up?” Take onboard all feedback. You don’t have to follow their advice, but consider whether it’s valid before you dismiss it.
Now you know how to write a business plan that works. There are many good business plan templates available for free online, but consider the first three tips before you decide which one to choose. If they don’t address those points, keep looking. As you can see, a good, simple business plan includes logical points like explaining what makes your business stand out, what your profit predictions are, and who you’re competing against. There’s still no guarantee it’ll get the right funding or ensure your business succeeds, but you’ll have the valuable preparation the 80% lacked. Most businesses fail. Follow these tips to be a success story!
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