Approximately 20% of small businesses in the US fail within the first year. They fail for multiple reasons; lack of funds, lack of expertise, poor product-market fit.
Are you starting a business and want it to be successful within the first year? Then put writing a business plan at the top of your to-do list.
So you have a million-dollar idea. To understand if that idea can be turned into a profitable business, you need to get it down on paper.
Running numbers and sketching out all the essential details is an integral part of founding a company. It will give you a projection of where you want to take the business and more clarity on how you will build it.
No business can launch without a solid plan that outlines what you will do and how you are going to do it.
Want to know how to write a plan that’s destined for success? Keep on reading to find out.
1. Don’t Exaggerate When Writing a Business Plan
One of the biggest mistakes new business owners make when starting a business is overestimating the numbers.
It’s easy to lose sight of how much things cost and the profit margins when you have never run a business before. So when you write your plan, be conservative with the numbers.
Try not to get over-excited when you put down on paper how much money you predict to make. Sorry to be negative here, but there will always be unexpected costs and unforeseen circumstances which could impact your business.
Plan for this and create a buffer. This will put you in a much better position when you launch.
2. Know Your Numbers
When you write a business plan, you need to learn the numbers. You’ll be asked exhaustively about the figures in your plan.
Stakeholders, financial advisors, potential partners, and collaborators will ask for detailed finances when you start your own business.
If you can’t recite numbers that add up, nobody will be able to take you seriously. Make sure you have a legitimate accountancy plan. If numbers aren’t your thing, employ someone to help you.
You’ll need evidence to back up your claims. Do the research and have substantial evidence lined up to enhance your plan.
If you want to get investment for your business, you will also need a substantial and professional business plan.
3. Know Your Market Inside Out
Is there a market need for your business? Why is your business going to fill a gap? If the answer is no or you aren’t sure, then do your research!
Find out what the current market offers and do something different. Create a USP that makes you stand out.
Do some customer research too. Who is your ideal customer, where do they hang out? How will you encourage them to use your business?
Speak to your potential customers to understand their problems and needs. Will your business be able to fulfill your customers’ needs?
Lack of product-market fit is one of the main reasons new businesses fail. 42% of new businesses fail because there is no market need for them.
Make sure people need your product or service. Don’t start a business on the assumption people need what you offer. Start a business because you KNOW they need it.
4. Understand Your Competitors
You need to know the market you are entering, and to do this, you’ll need to do some analysis of your competition.
If you want your business to succeed, make a detailed competitor analysis part of your business planning.
Take at least three of your competitors, look at what they do well, what they don’t succeed at, and think about how you could do it better.
How are they promoting their businesses? What’s their sales pitch like? What are customers saying about them?
How much of the market are your competitors capturing? Could you take some of their market share, or are their customers staunchly loyal? Write down all your analysis in your plan.
5. Develop Your Marketing Strategy
The old saying “build it and they will come” is unfortunately long dead. If you want to have a successful business in the 21st century, you need a solid business marketing plan.
Include detailed information about how you will target your potential customers and get them through the door.
Will you use online advertising? Traditional flyers? Email marketing? Include a budget for marketing and promotional materials in your financial plan too.
You can’t just try a few things and hope for the best when growing your business. Flesh out a solid growth plan with targets and objectives. Include your strategies for how you’ll get there.
For example, say you are writing a beauty salon business plan to target 100 customers in the first month. It’s an achievable target; you need to plan how you will make it happen.
Time to Get Writing
Now you know the ins and outs of a professional and well-polished business plan, it’s time to get writing.
Do your research, take your time; it’s never a good idea to rush writing a business plan. Instead, you want to write a plan you will be able to use. It will be the foundation of everything you do in the business for years to come.
Map out the structure and then slowly start to flesh it out. Of course, you can always seek help from professionals if you aren’t sure about specific aspects.
Good luck with creating the plan for a successful business!
Want more tips on building a business? Check out some of the other articles on the blog.
