A business plan is your roadmap for your company’s foreseeable future. It lays out your goals, objectives, and strategies for achieving them while also serving as a tool for attracting investors and partners.
While there’s no one-size-fits-all approach to writing a business plan, there are some key elements you must include. These include your business model, value proposition, target market, competitive landscape, and financial projections.
Many resources are available to help you if you’re unsure where to start, including templates and software. When you’ve got a handle on the basics, you can start tailoring your plan to your specific needs, which we’ll outline in these ten tips:
Tip #1: Create a Business for Your Customers
Every business plan should start with an audience in mind. Who will be reading it, and what is the plan’s purpose? This will determine the key facts and figures that need to be included. For example, if the plan is to secure funding, then showing how the investment will provide a good return is essential. If the audience is a potential business partner, then proving that the company can afford to pay back any loan is crucial.
Tip #2: Know Who Your Customers Are
When starting a business, you must thoroughly research your target market. This means understanding your potential customers, their needs and wants, and what kinds of products or services they already use to meet those needs. Only by knowing your market can you develop a business plan that will make your business successful.
Specifically, you need to know the size of your Total Addressable Market (TAM), Serviceable Available Market (SAM, and Serviceable Obtainable Market (SOM). The TAM is the total market available to your product or service, the SAM is the percentage of the market you can acquire based on your methodologies, and your SOM is the section of your market you can realistically acquire.
Tip #3: Know Your Competitors, Too
Competitors are other companies or brands that offer similar products or services to yours. Thus, it’s important to identify your competitors so that you can learn from their successes and avoid their mistakes. You’ll need to research your industry and local market to determine your main competitors.
Once you’ve identified your competitors, you can assess their strengths and weaknesses. This will help you develop strategies to improve your business and stay ahead of the competition.
Tip #4: Be Detail-Oriented
Your business plan is like your company’s resume; it must be clear, concise, and free of errors. It should give the audience an overview of your business, professional ability, and goals. Most importantly, it should make them believe that you are capable of achieving your objectives.
Tip #5: Think about Your Potential Investors
When entrepreneurs are trying to raise money for their start-up, they often focus too much on themselves and not enough on what they can offer investors. It’s important to remember that investors are not just looking to give money to a good cause—they want to make money.
When pitching your start-up to investors, focus on what your company can offer them and how they can earn back their capital and more by investing in your company.
Tip #6: Be Transparent about Your Products, Services, and Financials
Your business plan should mirror your company’s goals, including your products or services, target market, competition, and management team. It should also include financial information, development goals, and your overall strategy. Leaving out important information will not reflect well when you present your plan to investors.
However, we do understand that not everyone who starts a business has a degree in business. If figures aren’t your purview, seek assistance when producing your business plan from Stellar Business Plans.
Tip #7: Sweeten the Deal in the Executive Summary
An executive summary is a key component of a business plan because it provides readers with a snapshot of what the plan contains. This part should be written last after the rest of the plan is completed to accurately reflect the plan’s contents. The executive summary should be engaging and realistic and provide readers with an overview of the plan’s main points.
Tip #8: Get an Outside Perspective from a Business Adviser
Getting an objective opinion on your business plan is important before you move forward. Choose someone experienced in business who can offer helpful, constructive criticism. Your local Chamber of Commerce or Enterprise Agency can help you find someone who can review your plan.
Tip #9: Implement with Care
Once finalised, carry out the business’s goals, strategies, and methods. Refer to the business plan regularly to guide the development and growth of the company or brand. The business plan should also be revised regularly to ensure it is on track to achieve its goals.
Tip #10: Include the TAM, SAM, and SOM
Total Addressable Market (TAM) refers to market demand for a product or service. The total addressable market is the full market potential for a product or service without regard to competition.
The Serviceable Available Market (SAM) is the portion of the market that a company can acquire. For example, if a product is only available in one language, the SAM would be the subset of the Total Available Market (TAM) that speaks the language that the product is developed for.
The Service Obtainable Market (SOM) is the part of your potential market that you can realistically hope to sell to. This is the group of people that you will initially target with your product.
Bonus Tip: Remember the Importance of the TAM, SAM, and SOM
This is all about seeing the woods for the trees because you want to sell products and services to those who are actual buyers. Hence drilling down to the SOM in the final analysis to achieve your ROI.
Create a Robust Business Plan with Stellar Business Plans
Achieve these and more with help from Stellar Business Plans! Our start-to-end service empowers startup clients to achieve their set goals, so book your consultation with us through our website today!