Who is your business plan for? That sounds like a simple question, but it’s not really. As a business owner, it’s important to have a business plan to guide your operations. Sometimes you also have to produce one for other people. Those different audiences are going to want different things from your plan.
You still need to answer all the questions, but the amount of time you spend on each section will vary depending on who the plan is for
If the primary objective of your business plan is to secure financing from a bank, start and end with the numbers. The financial section of your plan will be the section they turn to first. They are likely to dive into the assumptions you have used to build your proforma financial statements.
- Writing for this audience it is often helpful to create the projected financial statements first and then develop a plan to achieve those specific goals
- Present your assumptions clearly and consistently throughout the plan.
- If you haven’t made any sales yet, include compelling research information which supports your sales forecasts.
- Include a discussion of critical risks in the operation section. This is not being negative, it is being realistic. Bankers want to see you have clearly thought through what could go wrong and how you’re going to pay back the loan even if things don’t turn out quite the way you expected. They tend to be risk averse, so give them confidence by demonstrating you have thought through some of the worst case scenarios.
Savvy investors know entrepreneurs are overly optimistic with their financial projections. so they are less interested in the numbers. They want to see the follow clearly explained in your plan:
- Market Focus. Clearly describe the needs of potential customers rather than simply being infatuated with an innovative idea.
- Evidence of Customer Acceptance. Provide evidence your product will sell or is already being used, even if only on a trial or demonstration basis.
- Believable Forecasts. Entrepreneurs are naturally optimistic when explaining the future prospects for their businesses. Are your forecasts reasonable? If you have no sales, consider including compelling research information which supports your sales forecasts.
- Ability to lead the company to success. Demonstrate how the skills and experience of your leadership team make you uniquely qualified to run this business.
YOU AND YOUR TEAM
If you are writing this business plan for yourself and/or your team spend the bulk of your time on the action section of your business plan. Business owners tend get bogged down in the introductory sections of the plan and end up burning out before tackling the real meat of the plan; the strategy and operation sections. Action steps are overlooked and impede the growth of the business. Don’t let that happen to you.
And finally, identify the milestones which will tell you you’re heading in the right direction.
Answer the simple question, who is this plan for?