July 5th, 2016 / Insight posted in Blog

How to Write the Perfect Business Plan – Part 2

We previously discussed a few essential tips to writing the perfect business plan in Part 1 of how to write the perfect business plan. Business plans are however complex, and there are many more important things to know about before getting started. Below are three more tips.

Consider all stages of development

Thinking that  you will get your product or service right first time would be a fool’s errand. No product or service is perfect the first time around and development will be a key part of your entrepreneurial journey. Likewise, your business plan more than likely will evolve to take drastically different forms as lessons are learned, ideas are refined and your company expands. Noah Parsons, maker of LivePlan, likens making a business plan to driving a car, rather than launching a rocket ship. Many first-time business owners will try to make their business plan like the process of building and launching a rocket – they will try to account for every single detail, variable and outcome, then launch and hope for no errors.

Noah says it should be more like the process of driving a car, whereby alterations in direction and speed are necessary and constant. While this must be remembered, you should also think about all stages of the development process you will go through and try to consider the future directions you would like your business to go in. This will save you having to do things like rebranding further down the line to account for a new business direction for example, which can be costly and inconvenient.

Think about who your business plan is aimed at

Many people will sit down and allocate many hours towards writing and developing their business plan only to complete it and put it on a shelf in the office to gather dust. It’s surprising the amount of business owners that will draft a business plan simply because they think that’s what businesses are supposed to do, without having any real idea what the purpose of their business plan is.

Stop and think who you are writing it for. Are you writing it for future employees so that they can read it and understand what your business is about and what its direction is? Are you writing it so that you have a detailed synopsis of your business to take to potential investors or to obtain a bank loan to get your idea on wheels? Are you writing it for your eyes only so that you can use it as a reference point to help you meet targets? The purpose of your business plan will drastically shape the end result. If it is only for you to read for example, does it really need to be 50 pages long? If it’s for employees, should you keep the financial planning aspect separate for confidentiality reasons? Is it for a potential investor, where the financial projections will be entirely essential to include? Determining the answers to these questions will save you time when it comes to drafting your plan and help you get it right first time.

Be objective; avoid bias

Your idea, service or product is your baby and it’s easy to look at it with rose-tinted glasses. This should be avoided however, as difficult as it might be, especially in your business plan. You should maintain a healthy objectivity towards your own business so that you can be realistic with and manage your expectations. If you have your head in the clouds, you will inevitably be disappointed, and furthermore, anyone that reads your business plan will see right through it – bad news if you are trying to impress an investor. Business minded people don’t appreciate having their time wasted, so make sure your business plan is thorough, well balanced, but concise and conveys facts and not hopes and dreams.

Do you have any hints and tips for creating the perfect business plan? Tweet us your ideas @kingstonsmith and let us know your thoughts!