Importance of Business Plan
Thinking about starting a new business and need a business plan for yourself, the bank, or to show potential investors? what are the characteristics of a business plan? Becoming an entrepreneur takes a lot of thought, research, and preparation. Research has shown that many of the most successful companies have certain things in common. These things start with a great business plan, and these plans have been found to contain certain common qualities that help ensure their success. Here is the shortlist of those characteristics.
What are the Characteristics of a Business Plan
One of the most common traits of a successful 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. Show your investors how they will make money. Many business plans lay out their ideas and business model nicely but forget to clarify to your investors exactly how you’ll get them their money back plus the return on their investment. Fine-tune your presentation skills to attract business investors.
The most effective business plans always identify their target market. Often, entrepreneurs try to spread their product over a much larger market than it actually covers. Investors want to invest in companies that have clearly identified their markets and have a realistic view of their market share.
The best business plans usually include easily supported industry statistics. When a young company presents financial projections, lenders and investors will want to have data that supports the company’s financial assumptions. Where did you get the numbers for profits and the amount of inventory you will need to purchase? If you are using industry benchmarks in your plan, your prospective investors will be able to see exactly where your information comes from and know that you have done your homework.
Overall, the most successful business plans accomplish three main goals:
- 1) Appeals to your target customer audience.
- 2) Differentiates your business as unique.
- 3) Communicates your company’s value in an articulate manner.
The foundation of your business plan is to market yourself. Doing this properly will expand your reach and ultimately make your business profitable. Don’t forget that there are human beings reading the plan. Tell a compelling story, but make sure your numbers support it!