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  • How to write a winning business plan
    How to write a winning business plan No one builds a house by throwing up a few windows and putting the walls around them. It is critical to first lay a solid foundation, and build from the ground up. Your business plan is your foundation - the structure upon which your company will be built. The business plan lays out the details of your business, documenting your plans and addressing important aspects of your business. It is not only a document used for securing funding, it is a blueprint you’ll refer back to as you begin to build your business. Financiers want to see that your dream is built on solid facts and a clear understanding of the market and industry you propose to join. They are not going to hand out venture capital unless they’re reasonably certain of making a profit. A business plan is simply a document detailing how you plan to make a success of your venture. The following checklist will break down each element of the business plan, to make it more understandable. Begin at the beginning To create a business plan, you first need to understand why you need one. You will need to understand the plan’s purpose, and the key points it will need to cover. When creating your plan, ask the following questions about your proposed business: • What business am I planning to create? • What problem or need does my product or service address or fill? • What are my key milestones or goals? • How is my product or service different from what’s already available? • What is the market - what demographic do I hope to sell to? • What are the market conditions: if the economy is in a recession, will people have the disposable income to spend on my product or service? • Who are my customers - what is their motivation for buying my product or service? Do I truly understand their needs? • Who is my competition? • How do I intend to make money from my product or service? Are there possibilities for diversifying the income stream? • How do I intend to market my service or product? • Who is my staff? How many people do I need to employ to make this happen? • What are the profit and loss projections for the first three years? First steps 1. Begin with a purpose statement Imagine that you have just stepped into a lift, and realise the person on board with you is a major potential investor. He or she asks about your business. You have 30 seconds to sum up your idea. What will you say? You should be able to articulate, in one or two sentences, what your company does. 2. Condensed goals On a single page, summarise your profit and loss statement. Project your expected sales and income, and the costs of doing business. 3. Summarise In about one page, sum up the purpose of your company, the market size and opportunity, your competition, short and long term goals, profit and loss, and staff. 4. Vision statement This is a place to detail long-term goals. Where will your business be in five years time? In ten? How do you intend to reach those goals? 5. Five key points Sum up your product or service. Touch upon five key features that set your product or service apart. 6. Marketing plan What is your plan for marketing your product or service? How do you intend to create a return on your marketing investment? How will you create your brand? 7. Monetisation What is the source of your revenue streams? Be realistic. 8. Staff A one-page summary of the key players on your team and what they bring to the table in terms of education, experience and personality strengths, helps you understand what it takes to be successful in business. 9. Exit strategy Obviously, your investors expect a return on their investment. They are giving you a temporary prop, a support to get you through the beginning stages, but they’re not doing so from the goodness of their hearts. They want to turn a profit, and they want to know how you intend to pay them. 10. Profit and loss This is a detailed budget plan, projected over three to five years, of your expected income and costs of doing business. Include the investment, so that the investors can see exactly where their money is going and how you intend to spend it, as well as the income from your projected sales. Be realistic, and be honest about your costs and potential profits. Will this plan sell your company to investors and make you a success? That depends. The best plan in the world can do no good without one key ingredient: You. What the investors are really buying is you - your time, talent and dedication. Showing your investors that you understand the industry you propose to join, your customers, the market, and what it takes to succeed will assure them that the risk they are taking with their money is a reasonable one, and that they can expect, barring unforeseen difficulties, to get back a decent return on their investment. Investors, like you, are in this to make a profit. A solid business plan helps articulate that goal, and lays the foundations you will need to build a successful company.
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