A business plan is a roadmap that serves as a profit generation guide for your business. Creating a good one means providing all the details required for your company’s effective operation and management, discussing every possibility and the steps to be taken to achieve it, and explaining why you believe your venture will succeed.
Ten Crucial Issues To Consider When Making A Business Plan
There is no doubt that business plans can be an effective way to keep your business on the right track, but don’t forget that not all of them are created equal. To build a strong case, you have to consider ten crucial issues, namely:
Substance
You can make the most organized, professional-looking business plan, but if it’s short of facts and research, that’s not going to cut it. So before you spend time impressing your audience with form, make sure you’ve got substance to offer. For example, don’t make statements you couldn’t back with evidence. You need to be able to follow up each claim you make with facts or statistics, or at least a quote from a recognized expert.
Competition
Be ready to name your competitors and explain why you are different and better than them. However, do not go to the extent of attacking other businesses, especially when using only hearsay as the basis for your claims. You can make allusions – for instance, that a competitor is about to go bankrupt – but never resort to enumerating its flaws. This will not make a good impression on your audience when they review your plan.
Audience
Because there’ll probably be many people or organizations that will review your business plan, make sure you make enough versions of it. Each should be specific to a different type of audience you have. For instance, make one for venture capitalists or bankers, companies that may want to be your partner, individual investors, etc. Needless to say, each version should be designed according to what the intended audience wants to see.
Proof
This is crucial. If you predict being an industry leader within twelve months, you need to state what makes you think so in particular. If you say your product will take the market’s breath away, provide facts to substantiate your belief. If you announce that your team is totally qualified to drive your business to the top, make sure their resumes are aligned with your claims.
Financial Conservatism
If you think you can get half of the market in your first six months, you can provide your reasons for thinking so and give clues into your possible numbers. However, when making your financial projections, always stay on the conservative side – for instead, instead of 50%, aim for 10%. This will keep you safe.
Realism
You can have big plans and all, but unless they’re realistic and based on your available time and resources, nothing will work. If you’re partnering with a large company, for example, make sure you’re not underestimating time or costs. This is something you may only realize when you’re paying for supplies or dealing with customers yourself.
Extreme optimism when it comes to time and resources is a common mistake many entrepreneurs make. When you are realistic, your presentation becomes more credible. So to keep safe, always assume that things will take around 15% longer than you’d normally expect. Rely only on reason when making financial projections. Better to keep expectations low than to set them high but unmet.
Also, don’t be afraid to pay a professional accountant to help you set financial projections. They have the knowledge, skills and experience needed to handle your venture’s financial tasks and responsibilities, as well as present your numbers in a way that is acceptable to your audience.
In terms of time frames, be sure to do some research before making commitments. For instance, if you find that most similar businesses take at least a year to go full swing, that’s likely how long it will take your business to do the same. If you think you can finish your prototype in two months, commit to twice that much time. You’ll never know what issues you’ll face, especially those that you can’t control.
Management Team
A strong management team is indispensable to the success of any business. Make sure yours has excellent credentials, wide experience and proven expertise. Your staff don’t need experience in your specific field, though, but what they’ve done so far should run parallel to the skills you need for your venture to take off. If you’re short of those skills, you can try pooling a team of consultants or experts who have it taken, and then include their resumes.
Documentation
Documentation is important because you need to show why you believe your idea will work. Maybe others have done the same and were successful, or you’ve made a prototype. Throw in all the variables that can have a positive effect on the results of your idea, explain why certain variables don’t fit, and state how you plan to overcome all obstacles or make improvements en route to achieving your goals.
Investor Payouts
Obviously, you need to provide details regarding investor payouts, and remember that what is desirable to one investor may not be for the rest. For example, some will want to take an active part in the business, others will prefer not to involve themselves in daily operations, and so on. The key is to give investors what they want: a projection of when they can recover their investment and how much their ROI would be. Some will be fine with three years, others five. In any case, offer each investor options or at least tell them that you’re open to possibilities.
Originality, Brevity And Straightforward Facts
A good business plan should be original to you and free of fluff. Hence, avoid overused adjectives like marvelous, unbelievable, perfect, and so on. Also, if you must use the word, “unique,” be sure to have solid information to guarantee that what you offer indeed has nothing like it at all. A serious audience will want to avoid gimmicks of any kind. While they may excitedly sample the coffee or wine you send them alongside your business plan, that doesn’t mean you’re anywhere closer to getting their approval. Lastly, keep your business plan as short but robust as possible. If they need more information, wait for them to tell you.
Sample Business Plans
If you dig online, you will have countless business plan tips and tricks to collect, but of course, there’s nothing like analyzing actual samples before making your own. Below are fifteen of the best start-up business plans you can read, organized by industry and supplied with a short introduction. (please note that the industry overviews provided reflect the different industries’ state of affairs prior to the covid19 pandemic, which is already proving to be a game-changer.)
Coffee Shop
Industry Insights
The coffee shop industry in america is currently worth a total of $45 billion, with over 35,500 stores currently scattered around the country. Main drivers for this industry are taste and personal income, and profitability depends on such factors as location, drive store traffic and product quality.
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Digital Sales and Marketing Platform
Industry Insights
The industry was ruled by the large enterprise sector in 2019, owing to the increasing use of digital sales and marketing platforms, especially by sectors like automotive and hospitality. Nowadays, these platforms are not only popular among large enterprises but even small and medium-sized businesses.
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Advertising agency
Industry Insights
Worldwide advertising spending has been on a constant climb, exceeding the $500 billion mark in 2019. The u.S. Remains the biggest ad market, spending over $229 billion in 2018, while China comes in second, investing under $115 billion, or less than 50% of that amount, during the same year.
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Technology
Industry Insights
Technology has always been a popular focus of investment in most, if not all, economies. The u.S. Is only one one example, with global stalwarts like apple, facebook, microsoft, and the rest. Such companies are the unmistakable growth drivers of the industry, thanks to their endless and effortless innovations.
Cloud-based Enterprise Software
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Hardware and Software
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Home Automation
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Call Center
Industry Insights
At least 66% of global call centers are based in the u.S., with primary industries including insurance companies, banks and security services. As of 2019, Texas ranked first on the list of states with the most call center job opportunities, with around 33,875 open positions, followed by Arizona with about 13,380.
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Manufacturing
Industry Insights
The u.S. Manufacturing industry is hardly at its best today, but it remains one of the globe’s front-runners, still opening up almost unlimited opportunities for engineers and engineering technicians, manufacturing sales representatives and heavy equipment operators.
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Retail
Industry Insights
Consumer spending is projected to grow slow in 2020, from 2.2 % a year earlier to 2.5. Because of this, retailers are expected to be more prudent when making investments and adaptable in their approach towards anticipated and unanticipated developments.
Clothing
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Medical Equipment
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Restaurant
Industry Insights
Convenience-oriented technologies, labor issues, feasible food practices and increasing competition are but a few factors that have influenced the country’s restaurant industry. Currently worth at least $833 billion, the market is affected by the above factors more than ever today than at any other point in the past.
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Heavy equipment rental
Industry Insights
According to a study performed by the american rental association, the u.S. Equipment rental industry is enjoying an unprecedented high, with more than 90% of survey respondents saying they have rented equipment at least once in 2019. Of that group, more than half plan to rent even more in the near future.
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Car Wash
Industry Insights
The u.S. Car wash industry saw solid growth within the last five years to 2020, with the economy maintaining an uptrend and operators enjoying the advantages of increasing job opportunities and per capita disposable income. And with extreme oil price dips halfway through the period, more people were using their cars and thus likely to pay for car wash and other auto detailing services.
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Florist
Industry Insights
There are currently over 13,000 florist shops operating in the U.S. today, the industry makes a total annual income of over $4 billion. Demand for flowers relies heavily on discretionary consumer spending, and profitability is largely determined by marketing.
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Funeral Home
Industry Insights
The funeral services industry is right for investors seeking consistency of income. After all, death is a certainty, which means a constant flow of business is guaranteed. It is, however, not a growth industry. Companies cannot control death rates, so increasing profits is possible with limited options, like acquisitions and incremental price hikes.
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Wrapping Up
If you think a business plan is no big deal, you might be taking a far bigger risk than you realize. Yes, there are entrepreneurs who have made it big even without a business plan. They banked on their perfect timing, passion, and perhaps a bit of luck. Some succeeded without making anything that closely resembled a business plan. But none of that changes the fact that without a good business plan, the odds of failure are greater.
So will a business plan guarantee that a start-up will hit the big time? Certainly not either. But good planning can set the successful ones apart from the failures. If you’re keen on living your entrepreneurial dreams, you should leave no stone unturned when it comes to claiming your success. That is also the most important reason you should take time to create a solid business plan. While following the tips or learning from the samples provided above is no guarantee that your start-up will reach the heights, there’s no doubt that it can put you on the right path as you begin your journey.
