Upsize Stages: Writing a busin
UPSIZE STAGES: THE EARLY YEARS
02 :: Writing a business plan.
Key question to
address: How will
you be different?
You?ve decided to go forward with your business and the next step is raising some money. It?s time to start writing a business plan.
This document is important for startups for financing purposes, and even after the business opens it should be updated and referred to as a guide. But just because they?re vital doesn?t mean they have to be as complicated as brain surgery.
Business startups frequently get so confident in the success of their own idea that they feel unbeatable. They rely on instinct and think they can get away with having a plan but not writing it down.
But investors are going to want to have a sense for the homework you have done. They?ll want information about your projected financials, your competition, an idea of your mission, objective, target market and points of differentiation, marketing strategy and of course funding needs.
One frequently overlooked portion of a business plan is the competition analysis. Often entrepreneurs start thinking they are smarter than the market. While their ideas might be good ones, it?s highly unlikely that they will be entering an entirely untapped market. Depending on the business, it can be local, regional or national, but analyzing your competition not only gives you a better sense for what you will be up against when you start the company. It shows investors you are aware of your surroundings as well.
Once the competition has been identified, entrepreneurs should identify in the business plan how they plan to differentiate themselves from those competitors. That can consist of customer segmentation, intellectual property or some other factor, but companies without distinguishing factors are rarely going to last.
Another area that is often overlooked is a description of how your concept will differentiate itself from the pack. It can take many shapes. It doesn?t have to be physical, it doesn?t have to be a customer segmentation issue, but it does have to exist. And you have to be able to describe it if you want to convince people to invest in your company.
There are plenty of places to go for assistance. Organizations such as SCORE provide volunteer assistance with business plans and many other aspects of starting businesses, and business plan templates are available on the Internet. It also can be helpful to speak with people who have been in the industry before.
Remember that the business plan is just a means to an end. It?s important to make it detailed and spend time on it. But don?t make the document too long. Include a two- or three-page summary and have someone with writing skills edit your document. Investors usually have tons of requests to consider, so the more detailed you can be in a short amount of space, the better chance you have of getting an audience for your business.
Finally, passion wins. If you want to start a business, don?t do it just because you see dollar signs. It?s easier to sell yourself and your company if it?s something you believe in.
