The Secret Of Writing A Really Effective Financial Business Plan
The secret to writing a financial business plan that gets you financed – which is the real measure of its success – is to stay organized and concise. Exactly how to do that and convey all the information you need to convey about your new business idea will be fully explored just below. Here’s what you want to do:
If you can’t pique the interest of your reader with your Executive Summary, you’re going exactly nowhere, and you’re certainly not going to get funded. This needs to be no more than two pages, better yet one or less, and it explains your value proposition in plain language. What’s your business all about, how will it make money, and why that’s awesome. The summary should include the amount of investment needed to make the operation fly.
Describe your market, demographically. How old are they? Predominately male or female? What characteristics do they share in common? Total size of your market? Annual growth rate? All of these are important, and more. Remember that from the perspective of an investor, you’re describing the folks you’re going to be selling to. You’ve got to make the case that a) there are a bunch of them, and b) they’ll be interested in what you’re offering.
No business plan worth its salt can go without making reference to, and acknowledging your competition. You’ve got to not only identify who they are and what their strengths and weaknesses are, but how and why your company’s value proposition will allow you to compete head to head with the established players in your market.
Meet the Team
Now it’s time to introduce your investors to your incredibly talented staff and extol their virtues. Tell everyone what they’ll be doing and why it’ll make your enterprise such a staggering success. You should highlight the education, technical expertise or other skills that your team members bring together, and use these to tie back into your value proposition, highlight and differentiate yourself from your competition, and plug directly into your business model, below. The goal is to paint a glowing-but-accurate picture of your team and the company you mean to found, but in doing so, being careful to keep it real and genuine. You never want to overstate your case or make unsupported claims.
Time to get down to the nuts and bolts of things. Outline exactly how your business will be structured, what will make it tick, and how it will stand the test of time. Here, you’re going to need profit/loss projections going forward at least three years, and you’re going to need to be able to support those projections with data from the real world.
In the United States, our entire economy is geared toward making it relatively easy for people to start their own businesses and reach for the brass ring. It’s a system that has worked well for us for most of our nation’s history, but in order to fully realize the awesome potential starting your own business here represents, you’ve got to actually do the work.
A financial business plan, polished to a high sheen is the first, and in many ways most crucial steps toward launching your enterprise and making your mark on the world.