Thinking about starting a new business and need a business plan for yourself, the bank, or to show potential investors? You’ve come to the right place. Below are 25 business plan tips from the pros.
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Sam Baitz, CEO, Shield Funding
My best tip for writing a business plan is to take a step back while you are brainstorming, and come up with strategies that will help you avoid falling into those traps that make so many other businesses fail. You should ensure that your business plan accomplishes these 3 goals: 1) Appeals to your target customer audience, 2) Differentiates your business as unique, 3) Communicates your value propositions in an articulate manner. When marketing yourself properly becomes the foundation of your business plan, you will expand your reach and ultimately make your business profitable.
2. Sometimes the best schooling in developing your business plan can be purchased at the book store.
Michael D. Greaney, CPA, MBA, CESJ
Both undergrad and graduate I’ve taken courses on how to prepare businessplans, and have prepared a significant number. Perhaps ironically, I found all the material in the courses I took covered at least as well, and more entertainingly, in /Business Plans for Dummies/. Go figure. You don’t even have to pay retail if you go to abebooks.com.
Marc Prosser, Co-founder at FitBiz Loans
When a new or young company presents financial projections, lenders and investors will want to have data which supports the company’s financial assumptions. Where did the company get its numbers for gross profit and amount of inventory it will need to purchase? If the company is using industry benchmarks, it will gain more credibility in the eyes of investors than saying the company made reasonable estimates. How can you get this data in your business plan? LivePlan offers this functionality as part of its online business plan software or you can comb through U.S. Census Bureau data for free.
4. Be aware of pricing trends.
Leo Ashkan, Marketing, Prisync
If you have chosen to be in the highly competitive e-commerce industry, you need to be aware of prices. What I would like to recommend is, know the price trends via price tracking software to increase your knowledge and to have a fine-tuned pricing strategy.
Peter Duffy Obel, CTO, EcoMerc
GET HELP – find people in your network who have done it before, knowbusiness or otherwise may know something, and just ask for their advice and opinion. Assuming everything thing else is in order: Finance, Technology, Product, Legal. Remember your DNA and culture, there is a reason that you are starting this business, a purpose, a goal. Remember that and embed it in everything that you do in your new company.
6. Does your business plan tell a story? Captivate your investors by sharing an engaging story about your beginnings.
Thom Fox, Business Advisor & Host, The Engine Radio Blog
Tell a story with your business plan. After countless interviews with commercial lenders and venture capitalist, I heard one thing loud and clear – they want to know the business owner’s story. What drove them to start their venture. Why are they launching now? How does this fit in with their beliefs. They want to know information like this because when things go wrong (and they will) the business owner is the right person to weather the storm. Understanding someone’s passion and thought process can belay fears from financiers and others looking to back your business.
7. Don’t make your investors look for more information. Be sure you add all the details in your business plan.
Luciana Torous, 3 Leaf Tea, LLC www.threeleaftea.com
The best tip on writing a business plan is to make sure there’s enough detail so the investor or banker can make a good decision without looking for more information.
8. Have you heard of Business Model Generation? It may change your mind on creating a business plan.
LaTanya White, Global Entrepreneurship Educator
The business plan is dead! It’s far too intimidating to be the first step that an aspiring business owner should take. Instead, get cozy with this concept of Business Model Generation. Watch Simon Sinek’s TED talk on ‘starting with why’. Once you can truly articulate what you offer to the world, then begin to study your ideal customer through and through. All the pieces fall in from there.
Kenneth Burke, Marketing & Communications, Text Request
My one tip for creating a business plan is to have your plan reviewed by one or several other(s) who have no prior knowledge of your business concept or planning attempts. Like writing anything, when you create a businessplan, and put it through personal review after personal review, it’s very easy to both get lost in the minutiae and become numb to it. A fresh mind is always a good additive to business planning.
10. Along with professional advice, ask you friends and family to look over your business plan and offer their advice.
Irina Iliescu, Remote Workmate
*Don’t treat it as confidential.* Share it with your friends. Challenge them to improve it. Encourage them to ask even those silly questions they would normally be too embarrassed to ask. They might help you discover something big.
11. Spell it out for your investors: Explain exactly how they will make money from investing in your business
Tali Raphaely, www.taliraphaely.com
Show how your investors will make money! Many business plans lay out their ideas and business model nicely but forget to clarify the single most important thing – show your investors exactly how you’ll get them their money back plus the return on their investment.
Patrick Moss, EquityNet, LLC
It’s very important for entrepreneurs to identify their target market. Often, entrepreneurs will claim their product or service applies to a much larger market than it actually does, which is a common red flag for investors. Investors want to invest in companies that have clearly identified their markets and have a realistic view of their market share. For example, if you own a coffee shop in your town, your target market isn’t going to be everyone in your town that drinks coffee. It’s likely that not everyone in your town visits the area your coffee shop is located, and there are several other coffee shops that have established a share of the market.
Marc Prosser, Co-founder, FitBiz Laons
Venture capitalists and banks generally don’t make decisions quickly. There is a significant chance that the process may take from 1 – 6 months. Investors and lenders will want to see during this process, the company delivering on its projections and may request updates on the numbers. One way to make this process easy is by using LivePlan, which will automatically import data from QuickBooks into the business plan. Potential investors will be able to see tables which compare the actual numbers (sales, profits, expenses) versus the projected one.
Sharifah Hardie, Ask Sharifah
My #1 Tip for writing any business plan is, your money is in the Executive Summary. No matter how detailed a business plan is, a potential investor is not going to continue reading it if the Executive Summary doesn’t peak their attention. Provide the WIIFM (What’s In It For Me) immediately, so that the investors knows that this will potentially be a good investment and will continue to read on. Summarize all of your information so that reading the complete plan is really just a formality.
Anne Maxfield, Owner, Accidental Locavore
People writing business plans, tend to forget that there are human beings reading the plan. Tell a compelling story (and make sure your numbers support it).
Shane Park, Coinplay.io
Unless you’re required to write a business plan to secure a bank loan, don’t do it. Look up *Business Model Canvas* and save yourself a ton of time. Business plans are antiquated, time consuming exercises that string together a detailed list of assumptions—a lot of effort for questionable value.
17. Understanding your product and your customer segment can have you create a better business plan.
Mark Herschberg, Shermans Travel Media
Keep in mind that the go to market strategy and steady state marketing strategy are two different things. Many business models make sense at scale, but getting there is the trick. Ebay works with millions of customers, but doesn’t work the same at 5,000 customers. Having a clear sense of the initial product and customer segment and then how both evolve is key for both the business plan, and for overall success.
Nihar Suthar, www.niharsuthar.com.
My business plan tip is to include graphs! Graphs are easy to follow for anybody you might show your business plan to (especially having a line chart for projected growth). I did this several times. You can also take the graphs from your business plan after and incorporate them into your slide decks that you might use to pitch to investors.
Cate Costa, Small Business and Startup Consultant, www.CateCosta.com
My best advice for writing a business plan is to make sure that you are consistent across all sections of your plan and that everything is backed up with real data. Too many new entrepreneurs talk about all of the marketing activities they will do but then don’t account for them in the operating budget, for example. Or they list a number for monthly rent that isn’t realistic based on where they intend to open their store. Consistency and supporting data are both key; without them your business plan is a fantasy story, not a business plan.
CHAVAZ, Executive and Entrepreneurial Consultant, Author & CEO, AYF Consulting Corp.
Know Your Audience. Your business plan is still a sales pitch and you should have the same foundational principles but the wording should be adjusted to be appealing and engaging to the specific financing option(s) who may be laying eyes on your plan for the first time. I also encourage business owners to have a separate business plan that is private and written down like a map, as though they were writing driving directions. This plan can be a private plan that is not shared with anyone, but its aim is to keep your business on the road to success.
21. Whether courting investors or not, you should create a business plan to strengthen your business.
Anthony Kirlew, Business Advisor, AnthonyKirlew.com
I encourage all business owners to write a business plan whether they are raising money or not. Oftentimes people have the misconception that you only need a business plan if you are going to raise money. The business plan is critical, as it will help to form the entrepreneurs
idea into a workable action plan. With the right guidance (or even the right business plan template) you will answer many questions that you never would have otherwise thought of, and in the end, you will have a much stronger business and a great chance of survival.
Debra Dixon Anderson, Founder and CEO, Light of Gold PR, Marketing, and Consulting
- Which group of clients do you think best match your business? What is the demographic and what issues would those clients face?
- How do you plan on reaching your target market? What media channels would you implement?
- How do want your clients to view your business and what do you want them to take away from your brand?
- What do you think separates you from your competition?
Making sure that you provide the answers to the questions above will ensure a stronger business plan.
Brynn Winegard, Marketing Expert, Winegard & Company
Be Realistic:* Don’t bite off more than you can chew; the plan can always be amended/updated later; focus on medium-term goals with immediate tactics and an eye to the future; a plan that sets you up for disappointment and failure can be worse than no plan at all; the plan has to [be] accessible to all stakeholders and glean buy-in (not rejection!).
Dawn Kasper Gibel, Inspired by Dawn
My best advice for writing a business plan is to not get overwhelmed with the enormity of the task. Start with an outline of the major sections and fill each in with bullet points as you come across research and ideas that you want to include. Then go back later and write each section so that it’s easily understood by others.
Elizabeth R. Elstien, Write.Research.Edit.Sell.Educate
While the big picture is definitely important to where you want your business to be in the future, don’t overlook the details. Financials going 3-5 years out are crucial to understanding what you need to do to achieve success and imperative if a loan is needed. Think through every income and expense, such as updating software, tax increases as your business grows and all income-generating venues. Be creative, but realistic. Crunch those numbers and know what you have to make to stay afloat. I find that this really solidifies the business concept and inspires confidence that the business can be done. Research marketing first and do the financials next, so you have a solid idea of where you are headed before doing the rest of the plan.
Prabhath Sirisena, Co-founder, Hiveage
There are few things more frustrating than trying to read through poorly written material. If you are not a strong wordsmith, hire a professional business writer who can get your plan on paper and make it shine. From the cover page to the appendix, you’ll want to ensure that your plan is clear, concise, and detailed—and no more than about 20 pages long. Future investors, partners or employees who go through your plan will be looking for specific information, so it behooves you to make it easy for them to understand.
Over to You
Thanks for all who participated! Now it’s your turn. What’s your best business plan tip? Let us know in the comments section below. Want business plan software to help you write your plan? We recommend LivePlan.