Tips For Entrepreneurs On Preparing A Business Plan
When you're seeking financial backing for a new business venture, a well-written business plan is essential. An effective business plan should clearly set out your objectives for the business and should detail the strategy you're proposing to implement in order to achieve them.
So, how do you go about writing a good business plan? Here are a few pointers that you might find helpful.
Set out the purpose of your business
Your business plan should set out the nature of your business and should include information including:
- the goods or services you will be supplying
- your pricing strategy
- the purchasing and ordering mechanisms you will use
You will also need to give information about the potential market for your product or service. State the demographic of your target customer base and research who your competition is. You'll also need to detail your marketing and advertising strategy.
Choose the right business name
The name you choose for the business is also extremely important.
When choosing a name for your business, consider what image you want to put forward. Is the name you've chosen memorable and easy to spell?
You will also need to ensure that it hasn't already been taken by a competitor by Googling your potential name and seeing how many hits you get.
Work with your accountant to produce accurate financial forecasts
Financial institutions, such as banks will require realistic profit figure forecasts, together with details of how much money you will need and how you intend to spend it.
Work with your accountant to produce detailed and comprehensive financial forecasts for cash flow and profits. Your account will recommend restricting forecasts for the next three years with monthly breakdowns for the first year. Any further into the future and you're really just using guesswork.
Your accountant should err on the side of caution when forecasting. It's best to be slightly pessimistic in your projections, to demonstrate that you've been realistic in your expectations and aspirations. No-one will back a business plan that appears overly optimistic and 'finger in the wind'.
The finished business plan
The finished document should contain up to ten pages of text, and it should focus on the most important areas of the business as detailed above, together with your accountant's financial figures.
You could also include illustrative graphs and other relevant appendices if you so wish.
When preparing a business plan to attract backers for your new venture, take into account the above suggestions and ask your accountant for more advice and guidance.