6 Tips for Effective Business Planning

If you have decided to step into entrepreneurship, then first step you must be concentrating on is Business Planning the end deliverable of which is a Business Plan. Obviously if you have to travel from point A to point B, you don’t start the planning mid-way, rather you plan before starting from point A. It is very first step towards your dream. There are some essential guidelines people must follow while writing B plan for their start-up. Here are 6 tips that every entrepreneur should follow while planning his business.

Have a comprehensive B Plan

Key things (each of these things have multiple sub components and in fact a topic for separate blog post) to include here are:

  • Company Overview
  • Products / Services
  • Traction / Market Validation
  • Market Analysis
  • Competition
  • Strategy & Implementation
  • Operational Plan
  • Management Team
  • Investment Required and Utilization of same
  • Financial Forecast

Consult Experienced Person

Getting help from people who are subject matter experts can be highly beneficial because you may not be skilled in everything. To start with you may take help of a consultant who has experience in creating business plans (especially if your team does not have the required skills and experience – which is alright). They can give you exceptional tips to create a winning plan for new business or may even write the plan for you working with you hand in hand. It may also be fruitful to consult domain expert to gain insight about aspects of your business or technology that you are not an expert in.

Justify Clearly why your team is best suited

The same idea can be executed by another team. You also need to justify why your team is most qualified to execute this. You need to back this up by work experience, educational qualification, entrepreneurial experience, prior achievements of the founders. What is also important is to demonstrate synergy among the founding team. This can be done by talking about how long the team has known each other and how they complement each other’s skills.

Add Proof Points

Ideas can come anytime and anywhere – it is true but when you are writing a business plan, you should back your hypothesis with some proof points. It needs to be done at multiple places. Some of the examples are:

  • Proof that the problem which you are trying to solve actually exists
  • Proof that the problem is faced by large number of solution
  • Proof that people will be willing to accept your solution and also pay for it
  • Proof that you can acquire the customers at the assumed cost

The more well researched a business plan is the more realistic it is.

Make sure it is financially viable

All your ideas and strategies can remain on paper unless you have enough resources or cash to fund those initiatives. So, it is important to prepare a financial projection (even if it is not correct) to help you understand the business model and the flow of money. While preparing a financial model, it is essential to benchmark your assumptions based on the industry standards in order to keep it realistic.

This may be an eye opener for your business throwing insights that was not possible by hundreds of words written

Attract investors by topping it up with attractive Pitch Deck

For raising funds for your new business you must explain your investors that how they will get good returns on their investments! They will not give time to read the entire business plan. Therefore, at the end create a powerful and captivating startup investor presentation to make investors interested in your business. At a later stage (most likely in the due diligence phase) they might ask for a detailed business plan.

To conclude

Stay focused and be up-to-date with new trends in your target markets. As you move along, you might discover new things related to consumer behavior and preferences that may invalidate your older assumptions. New competitors may have sprung up or existing one might have acquired huge funding and hence muscle power. New government policy may have been announced.

Thus, having business plan is not a one-time process, if you want to beat your competitors you must add up new things constantly to your plan. Our advice is to revisit your B plan every quarter. It is the success mantra that every entrepreneur should focus on during entire business life-cycle.

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