While most business owners may find it hard to come up with new ideas, there is really no excuse for having a poor business plan.
During the early days of your startup journey, you should be able to do two things better than anything else: 1) give a straightforward and persuasive 30-second elevator pitch; and 2) develop a concise and realistic business plan.
While the elevator pitch can be used almost anywhere, it is really the business plan that is the most important document because you need to have it in order to attract investors, partners, and customers.
So where do you start?
Online you’ll find a lot of business-planning templates that you can download for free, but be aware because the quality of them can vary quite a bit. Another option is your local bank. Working with your bank’s business adviser will also give some idea about banking services that you may need to access in the future.
Another great resource is your local CPA – as long as the firm looks outside the box and provides more than accounting and tax compliance services. Some business owners are lucky enough to consider their CPA as a one-stop shop for almost everything they need. You can get your taxes done there and so much more, like connecting with a friendly face for one-on-one business advice and setting up guidelines on building that winning business plan.
As local CPAs, Williams & Kunkel has come across dozens of business plans and can give you a few pointers to help you on your own way:
- No matter how long your document is, it must have an executive summary that is no longer than a page. If the first few paragraphs don’t grab our attention, the rest will surely put us to sleep. Do not skimp on the quality of your executive summary and be sure that your overall plan is less than 10 pages, including financials. Anything longer and your reader may lose patience.
- Remember what your English teacher taught you. Poor spelling, bad grammar, incorrect punctuation, and a heavy use of acronyms and technical jargon will give the wrong impression,. No one wants to invest in someone who runs a business full of mistakes.
- Make sure there is both a ‘business’ and a ‘plan’ in your business plan. The business side of your document includes market analysis, competition, and your projected financials (see our article on SWOT analysis for more ideas). Your plan side should have specific timeframes of what you intend to do and how much you will spend along the way. The typical mistakes we see are inadequate expenditures, unrealistic revenue projections, statements such as ‘we have no competition’ and unfounded assumptions about what a potential customer will or will not do. Avoid these mistakes by giving us detailed financials that project out three years and are based on sound research.
- We are firm believers that a business owner can make or break any business. And most investors believe they are investing in a person – not a product or service. It is important to give us an idea of your background and credentials in the business plan. If there are weaknesses in your story, surround yourself with a team of respected and credible advisers that have a stake in the business, too. If you put up your hard-earned cash, this needs to be clearly highlighted. Every business has some level of risk; showing others that you are willing to take risks helps instill confidence in other investors.
- Finally, make sure you get tons of feedback on your business plan. Share it with as many people as possible that you trust, or contact a trusted adviser if necessary.